Agenda of Community Plan Committee

COMMUNITY PLAN COMMITTEE (Committee of Council as a whole)
Membership:	13
Quorum:	Half of the members
Meeting Cycle:	Meets as required during LTP and Annual Plan processes
Reports to:	Council

HUTT CITY COUNCIL

Community Plan Committee

Meeting to be held in the Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt on

Tuesday 11 June 2019 commencing at 9.30am.

ORDER PAPER

Public Business

1. APOLOGIES

Cr McDonald

2. PUBLIC COMMENT

Generally up to 30 minutes is set aside for public comment (three minutes per speaker on items appearing on the agenda). Speakers may be asked questions on the matters they raise.

3. Setting the Scene by Mayor Wallace (19/606)

4. CONFLICT OF INTEREST DECLARATIONS

5. Annual Plan 2019/20 Budget Updates (19/588)

Report No. CPC2019/3/101 by the Chief Financial Officer 11

Chair’s Recommendation:

“That the information contained within the report be noted and the matter be discussed.”

6. Naenae Pool (19/648)

Report No. CPC2019/3/100 by the Acting Chief Executive/General Manager City and Community Services 26

Chair’s Recommendation:

“That the recommendations contained within the report be endorsed.”

7. Jackson Street Programme - Extension of Area Subject to Targeted Rate (19/625)

Report No. CPC2019/3/108 by the Divisional Manager, Strategy and Planning 31

Chair’s Recommendation:

“That the recommendations contained within the report be endorsed.”

8. Recommendation from the City Development Committee - Hutt Valley Tennis (19/631)

Report No. CPC2019/3/58 by the Sport and Recreation Programmes Manager 159

Chair’s Recommendation:

“That the Committee:

(i) approves an additional budget provision of $850,000 for Hutt Valley Tennis; and

(ii) notes that any actual financial commitment to Hutt Valley Tennis (HVT) will be subject to various conditions including and not limited to:

(a) formal approval of a final design concept;

(b) evidence and comfort regarding the budget and in particular with regards to a final construction cost, and confirmed or committed fundraising (cash and in-kind);

(d) formal approval of a project governance structure;

(e) a senior Council officer(s) sitting on an appropriate Project Control Group; and

(f) formal approval of a business case that demonstrates the ongoing operational sustainability and maintenance of the facility by HVT.”

9. Recommendation from the City Development Committee - Petone Recreation Ground (19/634)

Report No. CPC2019/3/59 by the Committee Advisor 197

Chair’s Recommendation:

“That the Committee:

(i) notes that this is a partnership project between Petone Riverside Cricket Club (PRC), the community and Council;

(ii) approves a budget provision of $750,000 for a contribution to a new community pavilion on the Petone Recreation Ground; and

(iii) notes that any actual financial commitment would be subject to various conditions being satisfied including and not limited to:

(a) formal approval of a final design concept;

(b) evidence and comfort regarding the budget and in particular with regards to a final construction cost, and confirmed or committed fundraising (cash and in-kind);

(d) formal approval of a project governance structure;

(e) senior Council officer(s) sitting on an appropriate Project Control Group. (Recommend Divisional Manager Parks and Recreation or alternate and Manager Commercial Projects); and

(f) formal approval of a business case that demonstrates the ongoing operational sustainability and maintenance of the Pavilion by the PRC.”

10. Recommendation from the City Development Committee - Southend Business Group (19/636)

Report No. CPC2019/3/60 by the Committee Advisor 206

Chair’s Recommendation:

“That the Committee:

(i) approves an additional budget provision totalling $45,000.00 in FY2019/20 for the Southend Business Group to accomplish Stage two and Stage three of their Work Plan Concepts, attached as Appendix 1 to the report; and

(ii) thanks the Business Group for the work they are doing with the Southend area of High Street”

11. Recommendation from the Community Services Committee - Bell Park (19/608)

Report No. CPC2019/3/104 by the Team Leader Parks 220

Chair’s Recommendation:

“That the matter be discussed.”

12. Recommendation from the Community Services Committee - Te Whiti Park Proposed Extension (19/611)

Report No. CPC2019/3/107 by the Divisional Manager, Democratic Services 229

Chair’s Recommendation:

“That the Committee:

(i) notes the partnership approach with Council, Iwi and the community;

(ii) approves a budget provision of $300,000 for a contribution towards completion of the sports pavilion at Te Whiti Park; and

(iii) notes that any actual financial commitment would be subject to Te Aroha Sports Association raising the balance of funding for the completion of the project.”

13. Recommendation from the Community Services Committee - Accessibility and Inclusiveness Plan Subcommittee Requests (19/652)

Report No. CPC2019/3/110 by the Contractor 242

Chair’s Recommendation:

“That the Committee:

(i) allocates additional funding of $50,000 to the footpath maintenance budget to address the adequacy of footpaths in the city for use by those with disabilities/ mobility issues;

(ii) makes a $20,000 funding provision in the Annual Plan 2019-2020 to enable the installation of Blind Square in the Lower Hutt CBD and Jackson Street, Petone, to assist those with sight impairments to move safely around both these areas; and

(iii) notes that a timeline and plan for implementation arising from paragraphs (i) and (ii) above and related matters will be reported to the Accessibility and Inclusiveness Plan Subcommittee and/or Community Services Committee.”

14. Recommendation from Council - Homelessness in the City (19/649)

Report No. CPC2019/3/109 by the Principal Research and Policy Advisor 245

Chair’s Recommendation:

“That the information contained within the report be noted and the matter be discussed.”

15. Council Contractors and the Living Wage (19/605)

Report No. CPC2019/3/103 by the General Manager Corporate Services 253

Chair’s Recommendation:

“That the information contained within the report be noted and the matter be discussed.”

16. Annual Plan 2019-2020: Approval of Non-Financial Content (19/543)

Report No. CPC2019/3/99 by the Contractor 261

Chair’s Recommendation:

“That the recommendations contained within the report be endorsed.”

17. Further Information Requested by Community Plan Committee 8 May 2019 (19/589)

Report No. CPC2019/3/102 by the Contractor 264

Chair’s Recommendation:

“That the recommendation contained within the report be endorsed.”

18. Recommendation to Council (19/751)

“That the Committee recommends that Council approves the content of the Annual Plan 2019-2020 incorporating the budget and other changes agreed to by the Community Plan Committee at its meeting held on 11 June 2019, including decisions made on the following:

(a) Budget Updates - Report CPC2019/3/101

(b) Naenae Pool – Report CPC2019/3/100

(d) Hutt Valley Tennis – Report CPC2019/3/58

(e) Petone Recreation Ground – Report CPC2019/3/59

(f) Southend Business Group – Report CPC2019/3/60

(g) Bell Park – Report CPC2019/3/104

(h) Te Whiti Park Proposed Extension – Report CPC2019/3/107

(i) Accessibility and Inclusiveness – Report CPC2019/3/110

(j) Homelessness in the City – Report CPC2019/3/109

(k) Council Contractors and the Living Wage – Report CPC2019/3/103

(l) Approval of Non-Financial Content – Report CPC2019/3/99

(m) Further Information Requested by Community Plan Committee – Report CPC2019/3/102”

19. QUESTIONS

With reference to section 32 of Standing Orders, before putting a question a member shall endeavour to obtain the information. Questions shall be concise and in writing and handed to the Chair prior to the commencement of the meeting.

20. EXCLUSION OF THE PUBLIC

CHAIR'S RECOMMENDATION:

“That the public be excluded from the following parts of the proceedings of this meeting, namely:

21. Budget Updates 2019/20 - Commercial Underwrite (19/705)

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

(A)	(B)	(C)

General subject of the matter to be considered.	Reason for passing this resolution in relation to each matter.	Ground under section 48(1) for the passing of this resolution.


Budget Updates 2019/20 - Commercial Underwrite.	The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information (s7(2)(b)(ii)).	That the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding exist.

This resolution is made in reliance on section 48(1) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public are as specified in Column (B) above.”

Donna Male

COMMITTEE ADVISOR

25 11 June 2019

Community Plan Committee

10 May 2019

File: (19/588)

Report no: CPC2019/3/101

Annual Plan 2019/20 Budget Updates

Purpose of Report

1. To provide the Committee with the proposed budget changes for the Final Annual Plan 2019/20 for consideration and recommendation to Council.

Recommendations

That the Committee:

(i) approves the proposed list of budgets being carried over from 2018/19 to 2019/20 attached as Appendix 1 to this report;

(ii) endorses the 2019/20 budget updates and changes included by officers as detailed in paragraphs 21 to 33;

(iii) notes the limited capacity to increase expenditure budgets due to Council’s Financial Strategy limits on borrowing as detailed in paragraphs 46 to 48;

(iv) considers the additional expenditure budget increases for specific initiatives as detailed in paragraphs 49 to 64, including possible budget changes to eliminate any breaches to the Council’s Financial Strategy borrowing limits;

(v) approves a rates revenue increase by an average 1.8% in 2019/20, noting that there is an allowance for additional rates revenue of 1% from growth in the city’s rating base, as a result of new builds and property investment.

A) Background

2. The Local Government Act (the Act) requires adoption of a Long Term Plan every three years and an Annual Plan for each financial year. Council’s Long Term Plan (LTP) covering the period 2018–2028 was adopted on 28 June 2018, and an Annual Plan is required for 2019/20.

3. Section 95 of the Act requires the Annual Plan to contain the annual budget and funding impact statement for the year, and to identify any variation from the financial statements and funding impact statement included in the Long Term Plan for the year to which it relates. Budget requirements for the Annual Plan 2019/20 are addressed in this report.

4. Council adopted the Draft Annual Plan 2019/20 (DAP) budget in February 2019. This followed a lengthy process which included reviewing Council’s Financial Strategy and potential future cost pressures.

5. The final Annual Plan 2019/20 (FAP) is required to be adopted by Council on or before 30 June 2019. Failing to adopt the budgets for 2019/20 could impact Council’s ability to continue to deliver services and projects for Lower Hutt.

6. The financial forecast information presented within this paper does not include Council-Controlled Organisations, and represents the parent entity only.

7. Formal consultation was not undertaken on this years’ DAP, as no significant or material changes were proposed from the LTP. Instead, the 2019/20 Annual Plan had a different focus which was called “All going to plan!”, and was the subject of a new online engagement forum where residents were encouraged to share their views and ideas. The feedback gathered through this engagement was reported to the Community Plan Committee on 8 May 2019.

Naenae Pool

8. In April 2019 a decision was made to close the Naenae Pool due to safety concerns for the public and staff following new information in regards to a seismic assessment.

9. Officers have been working through the impact of the closure and the associated options to remedy this issue as a top priority. Council is expected to meet in late June 2019 to consider options and consultation (refer to the separate paper on the Naenae Pool included in this agenda). Given the high level of public interest and funding in this matter, it is likely that Council will need to progress this issue through a Special Consultative Procedure and an LTP amendment process.

10. Reference to the Minute No. CDC 19202 is also noted here and needs to be incorporated when considering budget change decisions for the FAP.

“That the City Development Committee notes officers’ concerns in terms of future funding of Significant and Capital Projects and recommends that the Community Plan Committee considers that given the recent closure of the Naenae Pool and Gym complex and the likelihood for significant new capital funding being required, that any actual and final commitment to other projects be subject to a solution, including the funding of Naenae Pool and Gym. This will allow Council to discuss financial parameters around the provision of a new facility, or remediation of the current structure for the community of Naenae.”

B) Financial Strategy Considerations

11. Council’s Financial Strategy was reviewed and updated during the 2017/18 Annual Plan process and reaffirmed during the 2018-2028 LTP process. The key elements underpinning the strategy include affordability of rates, achieving intergenerational equity by spreading costs between both present and future ratepayers, together with strengthening Council’s financial position.

Rates revenue increase for 2019/20 (refer Table 1)

12. The Financial Strategy limits the maximum increase in the rates revenue to the Local Government Cost Index for New Zealand (LGCI) after allowing for estimated rates growth of 1.0%.

13. The actual LGCI reported by BERL for the year ending 30 June 2018 was 1.8%. Council in reviewing the DAP agreed to increase rates by an average 1.8%. This increase aligns with both the reported LGCI as well as the budgeted increase that was included for year 2 (2019/20) of the LTP.

14. A further 1% rates revenue increase is expected to be received from growth in the rating base, as a result of new builds and property investment. Whilst this growth target is on track to being achieved by 30 June 2019, this will be measured and adjusted if necessary in late June 2019, immediately prior to calculating the rates in the dollar for the 2019/20 rates revenue requirement.

15. This paper includes further possible changes to the budgets for 2019/20 and beyond. Depending on Council decisions related to additional capital and operational expenditure to be included in the FAP, the average rates increase for 2019/20 may need to be revised to reflect changes agreed to.

Future rates revenue increases for 2020/21 and future years

16. The updated BERL forecasts for LGCI were applied in updating the rating revenue forecasts in the DAP. No changes to these are proposed in the FAP. Table 1 that follows provides a summary of the assumptions in the LTP versus the DAP.

17. In the DAP it has been assumed that the updated BERL LGCI forecasts are included for all years except for 2020/21. BERL is forecasting a higher LGCI of 3.3% in 2018/19, which would be the basis to determine the maximum for the 2020/21 rates increase based on application of Councils Financial Strategy methodology. The budgeted LTP rates increase level however was at a lower 2% level. The main driver for the LGCI increase of 3.3% relates to increased construction costs from increased activity levels and capacity constraints. This pressure is expected to ease over time as increased capacity allows. For this reason, officers advised in the preparation of the DAP 2019/20 that an assumed 2.3% rates increase (not the higher 3.3% level) was being assumed for 2020/21. In the preparation of the 2020/21 Annual Plan there will be an opportunity to review the 2020/21 rates increases based on latest information available.

18. Table 1: Assumed projected annual increase in total net rates income, excluding assumed growth in the rating base

2019/20

2020/21

2021/22

2022/23

2023/24

2024-2028

Per LTP assumed rates increases

(BERL LGCI 2017)

1.8%

2.0%

2.2%

2.4%

Per DAP and FAP 2019/20 assumed rates increases

(BERL LGCI 2018)

1.8%

2.3%

2.1%

2.3%

Financial strategy debt limits

19. A key consideration of Councils Financial Strategy is to maintain debt within limits expressed as a percentage of revenue: being 150% of total revenue in years 1 to 3, 130% of total revenue in years 4 to 6, 110% of total revenue in years 7 to 12 and 90% of total revenue in year 13 and beyond.

20. Council’s budgets for the LTP 2018-2028 were very close against these limits, particularly in the period 2021/22 to 2027/28. This paper includes further updated information about these debt limits.

C) Process to Update the 2019/20 Budgets

21. In considering the DAP earlier this year (Refer Report No. CPC 2019/1/8), a detailed review was reported in relation to revenue and expenditure. This included aspects such as user charges, development contributions, rates remissions, bulk water costs, insurance costs and capital expenditure (including budget transfers to operating expenditure).

22. In preparation for the FAP, the budgets have been further reviewed and updated to reflect latest information available. The latest forecast position for 2018/19 and the flow on implication into 2019/20 have been updated.

Budget changes incorporated into the 2019/20 Annual Plan by Officers

23. There are a number of other budget updates which have been progressed by officers and Council endorsement of these changes is requested.

Naenae pool and associated budgets changes

24. Following the closure of the pool, officers have reviewed the budgets and made assumptions about changes to be made:

(a) The timing of capital budgets have been changed: the $9M budget for a Naenae Pool Refurbishment has been brought forward one year to 2019/20 and the Naenae Community Hub budget of $8.1M has been pushed out one year to 2020/21.

(b) A reduction in Naenae pool net operating costs of $500k has been partially reallocated to fund other Aquatic Services budget of $300k. Further to this, funding has been included in the 2019/20 budgets for

- Supporting the Naenae CBD activation $200k (still to be determined how this will be committed)

- Special consultation and LTP amendment process costs $100k; and

- Naenae Community activities and events of $100k.

Three Waters

25. There are a number of operating savings expected from 2020/21 onwards due to efficiencies in the Three Waters activities (mainly Wastewater). The savings over the next 19 years are expected to total approximately $13M. These savings are offset by investment in the Wastewater infrastructure of $12M over the same period. The budgets have been updated to reflect these assumed savings and updated capital plans.

Accessibility and inclusiveness

26. The Community Services Committee has been considering projects related to improving outcomes for people in the city living with disabilities. A separate paper on this matter is included in the agenda. Additional funding of $20k is sought for the installation of Blind Square in the Lower Hutt CBD and Jackson Street Petone, to assist those with sight impairments to move safely around these areas. Officers have assumed that Council will be supportive of this budget change and have included the funding of $20k in 2019/20.

Comprehensive review of the City of Lower Hutt District Plan

27. Council has agreed in principle to commence a comprehensive review of the District Plan. Work is underway to assess the scope of this work and the likely financial resources. A District Plan forecast underspend of $200k in 2018/19 has been assumed to be carried forward to 2019/20, which together with other District Plan budgets will support progressing this work in 2019/20. In the development of the 2020/21 Annual Plan budgets, Council will be required to consider further ongoing budget requirements identified during the scope and financial resources review that will be completed during 2019/20.

Promotions and events budget for Highlight Festival

28. This free annual event has regional appeal with attendances in excess of 130,000 resulting in significant benefit to Lower Hutt. The net operating budgeted cost for Council for 2019/20 is $307k. Officers have increased the budget by an additional $100k for two years to sustain the faster than anticipated growth and significant outcomes this event is delivering. Whilst revenue through commercial sponsorship and grant funding is increasing, the scale of the event requires additional budget to ensure its safe and successful delivery.

Parking revenue and infringement fees

29. As budgeted revenue levels have not been achieved in recent years, the FAP budgets have been updated to reflect latest estimates. This is largely due to Riverbank Market parking revenue budgets being optimistic and infringement revenue reducing due to a greater level of compliance.

Petone library

30. The LTP included a budget for Petone Library of $1.5M in 2021/22. Over the past few months Officers have considered options for the Library. After completing public consultation and taking into consideration the current priorities of Council the decision was made to put the project on hold and revisit the proposal in 2021/22. The budgeted funding remains unchanged.

Other budget changes

31. There are a small number of minor amendments incorporated into the 2019/20 budgets. These largely relate to known changes to the budgets following the receipt of new information.

Carry over of budgets from 2018/19 to 2019/20

32. Officers have identified several budgets required to be carried over from 2018/19 to 2019/20. Approval of the proposed budget carryovers outlined in Appendix 1 is sought. The total value of the carry overs from 2018/2019 is operating net $4.0M and capital $16.0M.

Financial risks

33. There are a range of financial risks which will be required to be managed proactively during 2019/20. This includes cost pressures across core operations and increasing construction costs. Council may also wish to make funding decisions for service changes or key projects, for which there is no budget set aside currently in 2019/20. Examples here include potentially the Living Wage for contractors.

D) Overview of Updated Key Financial Information

Updated Debt Forecast and Comparison to Financial Strategy Debt Limits

34. The graph that follows summarises the FAP projected financial results for the debt position compared to our Financial Strategy debt limits, after adjusting for budget changes described in the previous section. These results do not however include any additional budget expenditure decisions to be considered in this paper (refer paragraphs 49 to 64).

35. Debt as a percentage of operating revenue peaks at 127% in 2022/23, which is within the borrowing limit of 130% for that year by $6.2M, whilst in 2025/26 the forecast percentage of 109% is within that years limit of 110%, by $2.4M.

36. Graph 1: Comparison of FAP debt to revenue percentage to Financial Strategy limits

Capital investment overview

37. The total capital investment programme proposed for 2019/20 total $67.4M , which includes:

- $18.6M for Roading and Accessways

- $15.8M for Three Waters

- $4.5M for Solid Waste

- $4.8M for City Growth

- $21.6M for Leisure and Wellbeing.

- $2.1M for Organisation

The FAP capital expenditure for 2019/20 has increased by $21.1M compared to the DAP, largely due to carryovers of $12.1M and bringing forward $9M for Naenae Pool to 2019/20 from 2020/21. The table that follows provides further detailed explanation.

38. Table 2: High level summary of 2019/20 capital investment plans

$M	DAP 2019/20	FAP 2019/20	Variance	Commentary
Total capital expenditure	46.3	67.4	21.1	Increase in capital expenditure is largely due to Naenae Pool $9M brought forward plus carryovers of $12.1M
Comprising: Roading and Accessways	14.7	18.6	3.9	Mainly due to carryovers $7.7M less $3.8M for cycleways already included in DAP. Main carryovers are Eastern Bays Shared Path and Cycleways Beltway
Three Waters	11.6	15.7	4.1	Mainly due to carryovers $4.1M. Includes $0.3M for Water Supply, $2.3M Wastewater, & $1.5M for Stormwater Network Upgrades
City Growth	4.5	4.8	0.3	Mainly due to carryovers $0.3m.
Leisure and Wellbeing	9.0	21.6	12.6	Mainly due to Naenae Pool $9M brought forward and carryovers $3.8M. Includes $1.0M on Pools, $0.5M on Halls, $0.5M on Dowse, $1.1M on Parks & Reserves.
Other	6.5	6.7	0.2	Mainly due to landfill carryovers and capital adjustments $0.2M.

Further information about the carryovers of budgets into 2019/20 is included in Appendix 1 to this report.

Operating Budgets Overview

39. The table that follows provides an overview of the revenue and expenditure budgets for 2019/20.

40. The net result for the year shows a deficit of $13.5M. Included in the budgets are the following key budgets:

- Grants to be paid to the Community Facilities Trust (CFT) for capital related works in 2019/20 total $6.8M (includes Sportsville Wainuiomata $4.8M and Hutt valley Gymsports $2M). Whilst the accounting treatment for Council is for this to be an operating cost, at a group level the net impact are capital investments.

- Funding of $6.3M for the Development Stimulus Package, which was approved by Council previously as part of the broader city growth development strategy.

41. Table 3 - high level summary of operating budgets for 2019/20 budgets

$M	DAP 2019/20	FAP 2019/20	Variance	Commentary
Rates revenue	108.1	108.1	-
Other revenue	64.0	65.0	1.0	Largely due to $1.6M of additional carryover subsidies less $0.4M user charges (mainly parking).
Total Revenue	172.1	173.1	1.0
Expenditure Adjustments: Carryovers from 2018/29 to 2019/20 (per attached list) Naenae Hub transfer from 2019/20 to 2020/21 Less carryovers included in DAP (CFT $2.5M, Mahia Atu Partnership Fund $0.1M) Plus Dev. Stimulus from savings in 2018/19 Other minor adjustments	188.5	188.5 5.5 (6.0) (2.6) 1.6 (0.4)		Mainly due to carryovers $5.5M (($7.2M less CFT Naenae Hub $1.7M carryover moved to 2020/21), less Naenae Hub $6.0M moved to 2020/21, less $2.6M carryovers included in DAP, plus additional budget provision for Development Incentives $1.6M which is offset by savings compared to forecast in 2018/19.
Total Expenditure	188.5	186.6	1.9
Net Deficit	(16.4)	(13.5)	2.9

42. Further detailed financial information is available in the attached Appendices. These include:

- Appendix 2 - Financial Statements,

- Appendix 3 - Activity Statements

- Appendix 4 - Funding Impact Statements

- Appendix 5 - Projects Lists.

E) Budget changes for consideration by the Committee

43. The potential budget changes that follow from paragraph 49 onwards are a result of recommendations from Committees and Councillor led working groups/ briefings.

44. Table 4 - Summary of budget changes for consideration by the Committee

$000	2019/20	2020/21	2021/22
Lower Hutt Homelessness Strategy (opex)	560	520	520
Southend Business Group (opex)	45	-	-
Hutt Valley Tennis (opex)	850	-	-
Petone Recreation Ground (opex)	750
Te Whiti Park proposed extension (capex)	300
Bell Park (capex)	250
Total	2,755	520	520

45. As with previous years, officers will be in attendance at the meeting to operate a financial model so as to provide Councillors with an update on the financial forecasts and debt position when proposed budget changes are considered for approval.

46. As discussed earlier in this paper there is limited capacity to increase expenditure budgets due to the debt limits set in the Financial Strategy. Table 5 provides a summary of the key years where debt as a percentage of revenue peaks in comparison to the Financial Strategy limits. As an indication of the capacity available if additional budgets of $1.5M were included, Council would not breach any of the debt limits however it would be very close.

Table 5 - Indicative debt limits ahead of budget decisions by the Committee

Year

Debt limit

BEFORE any budget changes by the Committee

AFTER assumed budget increases by the Committee of $1.5M

Debt to revenue %

$M variance to debt limit

Debt to revenue %

$M variance to debt limit

2022/23

130%

127% (3% gap)

$6.2M

128% (2% gap)

$4.1M

2025/26

110%

109% (1% gap)

$2.4M

109.9% (0.1% gap)

$0.1M

47. Graph 2: projected debt as per Annual Plan 2019/20 excluding further budget changes for consideration by the Committee

48. Given the limited funding available due to the Financial Strategy constraints, Council may need to consider potential budget offsets, such as reprioritising budgeted expenditure or changing the timing of planned projects, should it want to include new budget provisions in excess of $1.5M.

Council Contribution to Improving the Response to Homelessness in Lower Hutt

49. Beginning in January 2018, Council conducted research into homelessness in Lower Hutt and, following a Council resolution in May 2018, work has been completed to develop a homelessness strategy and action plan. During this work officers engaged widely with people experiencing homelessness, individuals and agencies in the city, and Government Ministries, and there has been a high level of support for Council’s overall leadership and its own commitment to contribute practically to improving the response to homelessness in Lower Hutt.

50. The work culminated in Council resolutions on 26 March 2019 (Refer to Minute No. C19123 for further information), whereby Council resolved to support the strategic approach to homelessness in the city and agreed to forward resolutions to this Committee for consideration as follows:

(a) agrees the three-year funding proposal in option one to contribute to implementing the Lower Hutt Homelessness Strategy, of Year One: $560k; Year two: $520k; and Year three: $520k;

(b) agrees to review the action plan after the initial three-year period with further funding considered as part of the Long Term Plan; and

(c) agrees that Council participates in the Governance of Housing First in the Hutt Valley and Wellington along with partners including Iwi, non-governmental organisations, local government and central government.

51. The Committee is requested to consider the additional funding proposal as below:

$000	2019/20	2020/21	2021/22
Lower Hutt Homelessness Strategy (opex)	560	520	520
Includes: Access to private rented accommodation with support	110	110	110
Prevention of homelessness	370	370	370
Providing housing advice and advocacy	80	40	40

52. The recommendation aligns with the findings of the research in terms of lack of access to settled accommodation and a focus on prevention – leading to high use of temporary and unsuitable accommodation – and the lack of capacity to respond to the needs of people who are at risk of homelessness or who are experiencing homelessness. The funding will assist Council to achieve the priorities of the homelessness strategy, as well as helping to achieve overall Council aims and outcomes including “empowering brighter futures for those most in need in the city” and ensuring that Lower Hutt is a safe and healthy city in which all residents can prosper in strong and inclusive communities.

Southend Business Group

53. In April 2019 CDC considered a proposal by the Southend Business Group in relation to their Work Plan Concepts. The committee resolved in favour of a $45k budget provision towards Stage two and three of these plans (Refer to Minute No. CDC19210). The LTP does not include any provision for this proposal.

$000	2019/20	2020/21	2021/22
Southend Business Group(opex)	45	-	-

Hutt Valley Tennis

54. In April 2019 the City Development Committee (CDC) considered a proposal by Hutt Valley Tennis (HVT) for the tennis site at Mitchell Park (Refer to Minute No. CDC 19206 for further information).

55. The estimated cost of the proposed project is $2.2M which includes work to strengthen and re-orient the existing pavilion, demolish two squash courts and install a four court tensile membrane court structure. Council has previously set aside funding of $0.5M in the budget and further funding of $0.85M is sought. This funding would be by way of an operating grant to HVT.

$000	2019/20	2020/21	2021/22
Hutt Valley Tennis (opex)	850	-	-

Petone Recreation Ground

56. In April 2019 CDC considered a proposal by the Petone sporting community and in particular the Petone Cricket Club for a new community pavilion on the Petone Recreation Ground (PRC).

57. The proposed pavilion would be on the existing site of the PRC Clubrooms and would operate as a multi-purpose community facility (Refer to Minute No. CDC 19208 for further details).

58. The estimated cost of the project is $1.3M with proposed funding contribution by Council being $0.75M and the balance to be funded from fundraising and “in-kind support”. The LTP does not include any provision for this proposal. This funding would be by way of an operating grant to Petone Riverside Cricket Club being the owner of the existing clubrooms.

$000	2019/20	2020/21	2021/22
Petone Recreation Ground (opex)	750	-	-

Te Whiti Park Proposed Extension

59. In May 2019 the CCSC considered a proposal by Te Aroha Sports Association to progress a development plan for Te Whiti Park (Refer to Minute No. CSC19204 for further details).

60. The estimated cost of the proposed stage two multi-functional space is $0.84M. A proposed shared funding model with Te Aroha Sports Association includes a council contribution of $0.3M towards the project. The proposal also includes Council underwriting any shortfall in funding for the project and the Committee resolved “that any funding commitment would be subject to Te Aroha Sports Association raising the balance of funding for completion of the project”.

61. The LTP does not include any provision for this proposal. As this would be a Council owned asset which is then leased to the Association, the funding would be capital expenditure.

$000	2019/20	2020/21	2021/22
Te Whiti Park extension (capex)	300	-	-

Bell Park

62. In May 2019 CSC considered a proposal to issue a land lease at Bell Park to Ignite Sports Trust (Refer to Minute No. CSC19206).

63. The Trust has previously sought funding for a hard court surface area with an estimated cost of $250k. CSC resolved in support of this Committee considering this funding request for the Annual Plan 2019/20.

64. The LTP does not include any provision for this proposal. As this would be a Council owned asset the funding would be capital expenditure.

$000	2019/20	2020/21	2021/22
Bell Park (capex)	250	-	-

Jackson Street Programme – Extension of area subject to targeted rate

65. A separate paper in this agenda addresses the potential extension of the Jackson Street Programme. Additional budgeted costs for the programme would be offset by increased targeted rates (current budgeted level of $156k with potential increase of $74k to total $230k). Following decisions on this matter, the Annual Plan 2019/20 budgets will be updated to reflect these changes.

Legal Considerations

66. There are no legal considerations other than those already outlined in this report.

Financial Considerations

67. The financial impact of accepting all the budget changes proposed in this report is that Council will exceed the Financial Strategy borrowing limits. It is necessary to identify savings and/or make phasing changes to projects to offset the risks here.

68. The forecast financial information is based on estimates of costs and revenue into the future. The degree of uncertainty surrounding these estimates increases as the forecasts look out further into the future. Actual results achieved for each reporting period are likely to vary from the forecasts, and the variations may be material.

Next Steps

69. Following decisions/recommendations by the Community Plan Committee, Council will then meet to progress final decisions on the Budgets for 2019/20. The financial content of the Annual Plan 2019/20 will then be finalised and updated.

Appendices (Under Separate Cover)

No.	Title	Page
1 ⇩	Schedule Of Budget Carryovers From 2018/19 To 2019/20
2 ⇩	Activity Statements
3 ⇩	Financial Statements
4 ⇩	Funding Impact Statements
5 ⇩	List Of Projects

Author: Jenny Livschitz

Chief Financial Officer

Author: Philip Benseman

Budgeting and Reporting Manager

Reviewed By: Brent Kibblewhite

General Manager Corporate Services

Approved By: Matt Reid

Acting Chief Executive/General Manager City and Community Services

30 11 June 2019

Community Plan Committee

17 May 2019

File: (19/648)

Report no: CPC2019/3/100

Naenae Pool

Purpose of Report

1. The recent closure of the Naenae Pool is a matter of the highest priority to Council and the Community. The significance of the matter has been reflected by the urgency given to work being undertaken to explore options as well as Council’s community response. The purpose of this report is to provide the Community Plan Committee with an update on the Naenae Pool, and in particular:

a) A report of current work being undertaken.

b) A likely timeframe for key Council decision making through the rest of 2019.

c) Recommendations for immediate budget changes to the draft 2019/20 Annual Plan.

2. This report is predominantly focused on the facility. The report does not provide an update on the community and business response.

Recommendations

That the Committee:

(i) approves the proposed budget changes outlined in the report;

(ii) notes the update on progress for preparing high level information regarding options; and

(iii) notes the upcoming decision making process, including that a special consultation process and Long Term Plan amendment are probable.

Background

3. For some time Council has planned a major upgrade of the Naenae Pool, predominantly with regard to the 60 year old pool and associated plant. This was scheduled in Council’s 2018-2028 Long Term Plan for 2020/21/22. This planned work required the closure of the pool for 18 to 24 months.

4. As part of the planning and to help inform the upgrade, appropriate investigations were undertaken on the building structure. This included seismic assessments.

5. In December 2018, following receipt of an engineering assessment of the Naenae Learners Pool, a decision was made to close this part of the facility to the public. Since this time engineers have continued to assess other structural elements of the remainder of the pool.

6. On 10 April 2019, Council officers received a written report on the main pool advising the results of the partial seismic assessment for the Main Pool Hall and grandstand. This report indicated an overall rating of less than 34% New Building Standard or NBS. This area houses the main pool, fitness suite, meetings rooms and offices.

7. Major components of the building structure were reported to be below 20%.

8. At a workshop held on 10 April 2019 officers informed the Mayor and Councillors of the contents of the report. They were unanimous in their support of the officers’ decision to close the pool.

9. The decision to close the pool was made after considering a number of factors, with safety of the public and staff the number one priority.

Options

10. Officers engaged an independent consultant to complete a peer verification of the current 10 April 2019 findings. This work has been completed and the findings verify the NBS rating of below 34%.

11. Officers have engaged consultants to progress a remediation proposal and cost estimate for the facility. This will provide both a cost estimate for remediation as well as an indication of the facility’s useful life thereafter. A proposal has been submitted by engineers and is now with a Quantity Surveyor to provide a cost estimate.

12. Officers have also engaged additional consultants to complete high level concepts and cost estimates for a new aquatic facility as well as an integrated aquatic facility with a community hub. This work is making good progress and it is hoped to have this completed by mid-June 2019.

13. Note: these will be a long way short of being fully worked up design options and budgets. They are intended to provide Council with high level information to inform a decision regarding what option(s) Council wants to progress further.

Consultation and Engagement

14. Given the response from the community so far, including the turn-out at the recent public meeting on Naenae, we expect the community to be very engaged in this process. We have already started informal engagement through several channels. These include the digital platform www.haveyoursay.huttcity.govt.nz/naenae and two new notice boards on the outside of Naenae library. These are providing background information, latest updates on Naenae projects, details on other Naenae activities and initiatives, and a (digital) forum for discussion and feedback.

15. In June/July 2019 there will be public engagement on various options and costs. This will ensure that Council will be able to consider this feedback when deciding on its final preferred options for formal consultation.

16. All engagement and formal consultation will be carried out and promoted through a number of channels, which may include:

· The digital ‘have your say’ platform (with access made available at libraries)

· HCC Facebook

· HCC website (feedback form)

· Hard copy forms (available at Council facilities)

· Hutt@Heart Newscentre

· Hutt@Heart monthly e-mail newsletter

· Mail-box drop

· Advertising in the Hutt News

· Community drop-in session/s in Naenae.

Council Decision-Making

17. There is a need to progress decisions at pace in order to meet community and key user group expectations and deliver a solution for the pool. The proposed approach that follows has been developed with consideration being given to both these community expectations and also the timing of the local body elections on 12 October 2019.

18. Council will meet late June 2019 to consider options for the pool. The purpose of this meeting is NOT to make a final decision on an option and/or budget. The purpose of the meeting will be to:

i. Agree on options for public consultation (pre-election).

ii. Agree on funding options for public consultation (pre-election).

19. Following the election, the incoming Council will meet to consider consultation feedback and make a decision on the preferred option, including how it will be funded. This is likely to trigger an amendment to Council’s Long Term Plan (LTP) that will require a further ‘special’ consultation – as per the Local Government Act. Ideally a comprehensive and thorough initial consultation with the community will help inform and guide any special consultative procedure required for an LTP amendment.

20. NOTE: all of the above assumes a significant budget will be required for any remediation proposal with the need to consider the impact on Council’s Financial Strategy.

21. A LTP amendment is required to be audited which adds some complexity to the process and has timing implications. There is also the need to ensure that the public have a reasonable period to consider the options presented in the LTP amendment and are provided with an opportunity to present their views to Council on the options. This is likely to be a minimum period of two to three months in duration.

22. Through the remainder of 2019 and to also help inform a final Council decision, officers will also investigate and consider the broader New Zealand construction industry as well as alternative procurement options for a main contractor.

23. Ideally in early 2020, Council will meet to approve a final option and budget. This may be in the form of a formal approval of an amendment to Council’s LTP.

24. Following this approval the appropriate project governance and controls will be established to progress a project.

Immediate Budget Considerations

Operating Budgets – Nil Impact

25. The approximate net cost of the Naenae Pool included in the 2019/20/21 draft Annual Plan is $500,000 per annum. Officers have reallocated this to:

i. $300,000 aquatic services general. This is largely to cover the additional costs associated with flow-on impact to other pools, as well as any temporary solutions.

ii. $200,000 to support Naenae CBD activation (still to be determined how this would be committed).

26. The above adjustments have a nil impact on Council’s overall budget.

New Operational Budget Provisions

27. An additional $300,000 of new expenditure has been added over the next two years. This is made up of:

i. $100,000 Naenae Community Activities and Events x two years

ii. $100,000 for a special consultation and LTP amendment process in 2019/20.

Capital Expenditure – Timing Changes Only

28. Included in Council’s draft plan was $9M in 2020/21 for the major upgrade of the pool and plant. In the revised plan presented to the Committee, officers have brought forward all of this funding to 2019/20. This amount will effectively enable Council to progress (design, procurement, other) whatever option(s) are approved by Council.

29. As the pool facility is considered of higher priority, $8M (includes a carryover amount) of funding for a Community Hub in Naenae has been deferred from 2019/20 and into 2020/21.

30. Potentially other budget decisions will be required by Council during 2019/20. The above changes are simply to provide an immediate budget provision that will enable the immediate and ongoing progress of a priority project.

31. Council does not have sufficient information at this stage to make any other budget changes immediately.

32. Given the potential additional budget requirement a special consultation process and amendment to Council’s current LTP is probable.

Appendices

There are no appendices for this report.

Author: Matt Reid

Acting Chief Executive/General Manager City and Community Services

Approved By: Brent Kibblewhite

General Manager Corporate Services

37 11 June 2019

Community Plan Committee

16 May 2019

File: (19/625)

Report no: CPC2019/3/108

Jackson Street Programme - Extension of Area Subject to Targeted Rate

Purpose of Report

1. The purpose of this report is to provide the Community Plan Committee with information on which it can base a decision on whether or not to agree to apply the special Jackson Street Programme (JSP) targeted rate to an extended area bounded by Cuba Street, Hutt Road, Jackson Street and The Esplanade. The JSP targeted rate would apply to all commercial building owners (excludes residential buildings) business owners, managers and business people.

Recommendations

That the Committee:

(i) notes a survey of all commercial building owners in the proposed extended area covered by the Jackson Street Programme (JSP) was completed on 5 May 2019 and that the results of that survey are summarised in this paper;

(ii) notes that officers have checked the number of rate payers affected by the proposed extension to make sure that the calculation of the rate is accurate and that this has resulted in a recalculation of the rate that would apply should Council agree to the extension of the area subject to the JSP targeted rate;

(iii) notes that based on the new footprint and the total number of affected ratepayers to collect $230,000 (which includes GST) equates to 0.00051677 cents in the dollar;

(iv) notes that 0.00051677 cents in the dollar means that a property worth $100,000 pays $51.68 per annum, one worth $1m pays $516.77 per annum and a property worth $10m pays $5,167.70 per annum;

(v) notes that 33 submissions were received on the Statement of Proposal and the submissions analysis;

(vi) notes that 25 of these submissions were from affected submitters – either those already paying the targeted rate or those who would be under the proposed extension;

(vii) notes that 13 of these supported the extension and that all of these submitters are already paying the targeted rate for JSP;

(viii) notes that eleven submissions were from people in the proposed extension area and that all of these submitters were against the proposed expansion;

(ix) notes section 16 (g) of the Local Government (Rating) Act 2002 allows a targeted rate to be set if the activity/activities is identified in the Funding Impact Statement;

(x) notes that the Funding Impact Statement would need to be amended to allow the targeted rate to be extended so that the new rate can be applied; and

(xi) agrees to extend the targeted rate area for the Jackson Street Programme to the area bounded by Cuba Street, Hutt Road, Jackson Street and the Esplanade which will apply to all commercial building owners (excludes residential buildings) business owners, managers and business people in this area; OR

(xii) does not agree to extend the targeted rate area for the Jackson Street Programme to the area bounded by Cuba Street, Hutt Road, Jackson Street and The Esplanade which will apply to all commercial building owners (excludes residential buildings) business owners, managers and business people in this area.

For the reasons outlined in this report.

Background

2. Under section 78 of the Local Government Act, Councils must seek community views in the course of its decision-making processes and give consideration to the views and preferences of persons likely to be affected by, or to have an interest in, a matter. In this case, the views of those likely to be affected by or have an interest in an extension of the area covered by the JSP targeted rate were sought between 3 May and 4 June using the Special Consultative Procedure (SCP).

Discussion

3. JSP offers the following services to business owners, managers and business people:

a. monthly newsletter updates providing news on what is happening;

b. updates about safety and security issues, government or Council matters that could affect business or buildings;

c. work with Petone Library, Settlers Museum, Community House, Lions, Sports Clubs, Workingmen’s Club, Historical Society and local schools;

d. enhance existing businesses, attracting customers through the JSP web site and free touring Petone app. The web site provides business details, links to business Facebook/websites, provides pictures and videos and secondary business information; and

e. keeping track of people making business inquiries – for example, 13,512 people made more than 53,766 inquiries to businesses on www.JacksonStreet.co.nz over the six months to 30 June 2018.

4. Currently JSP receives $157,550 (which includes GST) via the targeted rate. This amount is adjusted annually by CPI. The extended area will enable the targeted rate to raise a further $72,450 with the rate set to collect a total of $230,000. The current rate is 0.0008032 cents in the dollar.

5. Based on the new footprint, to collect $230,000 (which includes GST) equates to 0.00051677 cents in the dollar. So a property worth $100,000 pays $51.68 per annum, one worth $1m pays $516.77 per annum and a property worth $10m pays $5,167.70 per annum.

6. Currently JSP is performing at the maximum level it can with the funding available to it. Increased funding will bring greater benefits for all businesses in the targeted rate area from the increased ability of JSP to run events, seminars, work with Council to attract larger numbers of visitors to Petone and ultimately to wider Lower Hutt. For example JSP will be able to expand the work they are currently doing with Council’s Events and Promotions team, the Great Harbour Way promotion and the provision of information about other attractions in the wider Hutt Valley.

Survey Results

7. Prior to undertaking the SCP, those affected by the change were surveyed to assess the level of support for the extension of the area covered by the JSP targeted rate.

8. A total of 107 valid^{^[1]} responses were received. Of these 97 were received from owners or tenants of commercial properties in either the current or proposed Jackson Street Programme area; the other 10 were disqualified from the survey. Of those who were eligible to answer the survey 71 percent were current JSP members and 29 percent were potential members under the proposed expansion area. The margin of error at a 95 percent confidence interval is:+/- 8 percent for the overall results;

· +/-7 percent for current members, and;

· +/-16 percent for potential new members

9. Current members of the Jackson Street Programme were asked whether they agreed or disagreed with a series of statements about aspects of the JSP’s performance. Most members agreed that JSP added value to the community (96%), organised activities that attracted people to the area (87%) and were run effectively (84%), and sent information that was relevant (88%) and timely (84%).

10. Around two thirds of respondents also agreed that JSP added value to their business (63%) and kept the JSP website up to date (67%). For both these aspects of performance 29 percent of respondents reported neither agreeing nor disagreeing.

Performance of JSP

11. Current members were also asked what the programme was doing well, what improvements they would like to see and if there were any current gaps the programme should consider addressing.

12. Fifty one respondents commented on what the programme was doing well; of these 30 mentioned communications, 12 events and activities and 12 promotion and marketing of the area and/or events and activities. Fourteen of the 38 responses suggested improvements including increased connections and events and 11 wanted to see increased, or in one case alternative, resourcing for the programme.

Awareness of JSP

13. Respondents, who were not current JSP members but owned or tenanted businesses in the proposed expansion area, were asked about their awareness of the JSP, of what it does, and of the proposed expansion.

14. Over three quarters (79%) stated that they had definitely, or were somewhat sure they had heard of the JSP. However only two thirds (65%) had any awareness of what JSP did, and less than a third (30%) were aware or somewhat aware of the proposed expansion.^{^[2]}

Expansion proposal

15. Overall 87 percent of respondents stated that they supported the expansion of the area covered by the JSP to include all commercial businesses in the area bordered by Jackson Street, Cuba Street, The Esplanade and Hutt Road.

16. The level of support was higher among current members (94%) than those respondents who were not current members but owned or tenanted a business in the proposed expansion area (70%). There was a higher percentage of respondents who responded ‘don’t know’ among this later group; 15 percent.

17. Including the margin of error for the survey and the subgroups below, we can be relatively sure (95 percent confident) that the level of support (those who responded “Yes” when asked if they supported the expansion) would sit within the following bands:

· Overall 79-95%

· Current JSP Members – 86-100%

· Potential Expansion Members – 54-86%.

Benefits/Concerns

18. When asked what they saw as the benefits or advantages of the expansion, tenants and business owner respondents who are not currently JSP members but are in the expansion area, focused on the greater benefit to the Petone community, including the ability to promote, and bring more people to, the area.

19. Current JSP members mentioned the increased funding and increased voice this would enable the businesses in the area to have. They also mentioned the greater number and variety of businesses included would assist in attracting more people and larger events to the area.

20. Current JSP members had some concerns about the stretching out of resources and the move away from a focus purely on Jackson Street. All respondents voiced concerns over increased traffic and car-parking in the area.

Direct Contact with Affected Ratepayers

21. To make sure that all affected ratepayers were aware of the proposal to extend the area subject to the JSP targeted rate, officers directly contacted each of them by letter enclosing the full Statement of Proposal and a submission form. This letter was sent to the address that the rates notice is sent. Ratepayers were advised that submissions would close on 4 June 2019 and that submitters who wanted to be heard should attend the Community Plan Committee set for 9.30am Wednesday 5 June.

22. Unfortunately, two days after the letter was sent to affected ratepayers the date for the Community Plan Committee was changed to 11 June and as a result another letter was sent to the same ratepayers to advise them of this change in date for public comment. Officers are not aware of any affected ratepayers coming to make public comment on Wednesday 5 June.

Amount of targeted rate

23. Officers have checked the number of rate payers affected by the proposed extension to make sure that the calculation of the rate is accurate. This further checking has resulted in a recalculation of the rate that would apply should Council agree to the extension of the area subject to the JSP targeted rate.

24. Based on the new footprint, to collect $230,000 (which includes GST) equates to 0.00051677 cents in the dollar. So a property worth $100,000 pays $51.68 per annum, one worth $1m pays $516.77 per annum and a property worth $10m pays $5,167.70 per annum.

Submissions Summary

25. A total of 33 submissions were received. The submission summary and copies of the submissions are attached as Appendix C and D respectively.

26. Twenty five submissions were from affected submitters – either those already paying the targeted rate or those who would be under the proposed extension.

27. Thirteen of these supported the extension – all of these submitters are already paying the targeted rate for JSP. These ratepayers will see a decrease in the rate they pay for JSP. Only three submitters detailed why they supported the extension, the reasons they gave were the increased networking opportunities and diversity it would bring to the JSP membership.

28. One submitter currently in the JSP targeted rate area did not support the proposal. The key reason for not supporting was the lack of “personal presence” of JSP on Jackson Street and the inclusion of large chain stores.

29. Eleven submissions were from people in the proposed extension area. All of these submitters were against the proposed expansion. The primary reason was that they run commercial or industrial businesses that would not directly benefit from JSP activities.

30. Of the remaining submitters, all of whom were from outside the area concerned:

a. Two supported the extension as they saw JSP as being very beneficial for the Petone area.

b. One did not indicate support for or against the JSP but highlighted the importance of Christmas events.

c. Five did not support the proposal – one because of the impact of traffic congestion if Petone became more popular than it is currently. Two of these were from residential building owners objecting to an increase in their rates.

Options

31. The Community Plan Committee can either agree to JSP’s request to extend the area for the JSP targeted rate OR can decide not to agree to the request.

Consultation

32. A survey of affected ratepayers was completed prior to the SCP being undertaken from 24 April to 5 May 2019.

33. Officers also directly contacted each of the affected ratepayers by letter enclosing the full Statement of Proposal, a submission form, the electronic link they could use to make a submission and the contact phone numbers of two officers so that people had the option of contacting Council directly to provide feedback. This letter was sent to the address that the rates notice is sent during the week beginning 20 May 2019.

34. Officers received one complaint from a submitter that they weren’t directly notified. This submitter was contacted directly as a letter was sent to the right business name and mailing address for that building owner. The business owner confirmed that they had been notified.

Legal Considerations

35. Section 87 of the LGA enables local authorities to use the Special Consultative Procedure when neither Section 86 or 93A apply but a local authority is required to use or adopt the SCP or if a local authority chooses to use a SCP. As JSP’s request requires Council to amend an existing targeted rate and this will require an amendment to the Funding Impact Statement, it was prudent for Council to use the SCP to ensure that all interested parties and those people who would be directly impacted by the extension of the area subject to the JSP targeted rate had an opportunity to make their views known to Council.

36. Under section 23 of the Rating Act 2002 rates must be set by resolution of the local authority.

Financial Considerations

37. The JSP has existed since 1991 and has over the years made a number of improvements to the services it offers to business owners, managers and business people. The JSP requires increased funding if it is to continue to improve and expand the services offered, leverage off existing successes and bring greater benefits for all businesses in the targeted rate area.

Appendices

No.	Title	Page
1 ⇩	Jackson Street Programme Survey 2019 Results	38
2 ⇩	Statement of Proposal - formatted Word version	60
3 ⇩	Submissions Summary - Extension of Area Subject to Targeted Rate for Jackson Street Programme	64
4 ⇩	JSP targeted rate submissions Part one .pdf	68
5 ⇩	JSP targeted rate extension Part two.pdf	98
6 ⇩	JSP target rate submissions part three.pdf	141

Author: Wendy Moore

Divisional Manager, Strategy and Planning

Author: Joyanne Stevens

Contractor

Approved By: Helen Oram

Acting General Manager, City Transformation

Attachment 3

Submissions Summary - Extension of Area Subject to Targeted Rate for Jackson Street Programme

SUBMISSIONS SUMMARY –EXTENSION OF AREA SUBJECT TO TARGETED RATE FOR JACKSON STREET PROGRAMME

*Indicated they wanted to speak to their submission

Submission one

· Was once a “personal presence in the street” of people who were on the JSP Committee but believes this is no longer the case

· If there is liaison with business owners and shop keepers the submitter is not aware of this – hasn’t been personally visited for four years

· Small boutique shops declining as other businesses take over e.g. food, women’s clothing, businesses like accountants and real estate agents. These businesses not catered for by present promotions such as events for children at Easter and Christmas

· Objects to emphasis on Christian festivals – one-eyed and un-PC

· Supports Petone Fair as the only real community event – feels JSP focuses its attention on the people who object to the Fair rather than seeing the bigger picture

· Is opposed to including large chain stores – not on Jackson Street and these places have ruined Petone. They have huge advertising budgets and don’t need to be promoted by JSP.

· Sees the proposal as empire building – doesn’t see any value in JSP as it currently operates

Submission two

· Runs a commercial business the success of which has no direct correlation with the revitalisation and promotion of Jackson Street

· Only businesses that benefit should have to pay

· Questions expansion to Esplanade – thinks towards the opposite direction (towards Udy Street) would make more sense as that area probably gains from JSP activities

Submission three*

· Supports the extension of the footprint – sees it as a huge advancement for the wider Petone area

Submission four

· Supports the extension of the footprint – sees it as a huge advancement for the wider Petone area

Submission five

· Doesn’t support the extension because of the impact it could potentially have on increasing traffic congestion in Jackson Street and wider Petone.

Submission six

· Against proposal

· Owner of one business in affected area (submission states two businesses but only one is in proposed expansion area)

· Business is industrial and therefore will not get any benefit just the cost associated with this rate

Submission seven*

· Does not support the extension

· Believes that the JSP have been very successful and as a result are in fact no longer needed.

· Feels that other mechanisms including the District Plan are sufficient to protect Jackson Street and Petone’s character.

· Is concerned that many of the businesses in the expansion area are of a type that would not benefit from the activities of the JSP, gives the example of the IBM Building

Submission eight

· Supports the program extension plan – no reason or explanation given

Submission nine*

· Supports the program extension plan – no reason or explanation given

Submission ten*

· Supports the program extension plan – no reason or explanation given

Submission eleven

· Does not support extension plan

· Notes the different types of businesses included in expansion area that would not directly benefit

· Concerned about the impact on parking

Submission twelve

· Business is not included in expansion area as north of Jackson Street

· Does not support as area around business is mixed commercial and residential and would not benefit

Submission thirteen*

· Objects to the proposed targeted rate extension – is outside of expansion zone

· Evidences the JSP’s focus on achieving outcomes for those on Jackson Street at the expense of other areas in Petone (sites Chairperson and Board Members submission to Plan Change 29 on behalf of JSP)

· Also mentions the need for a cost benefit analysis under the Rating Act 2002 which he would like a copy of

Submission fourteen

· Supports extension as it will help Petone grow and develop and become the gateway to the Hutt City

Submission fifteen

· Residential property – against proposal as it would increase their rates

Submission sixteen

· Own a property that is industrial use and feels there will therefore be little benefit to him

· Suggests new members pay lower rate and existing members pay current rate

Submission seventeen

· Supports the program extension plan – no reason or explanation given

Submission eighteen

· Residential and not in expansion area – against proposal as it would increase their rates

Submission nineteen*

· Against proposal

· All the emphasis is on Jackson Street and therefore funding should be limited to Jackson Street

· Is not a retail business and would therefore get no benefit from the activities of the JSP

· Is concerned that the proposal got this far based on the survey – is of the understanding the survey was basis for proposal

· Concerned businesses will not be able to pass on this extra cost as it will not appear in the CPI (the most used method of calculating lease movements)

Submission twenty

· Objects to proposal as does not see the relevance for light industrial premises such as theirs.

Submission twenty one

· Supports proposal

· Points out the activities and assistance that JSP offers and their work as being one of the key reason Jackson Street has been transformed

· Believes without the work of the JSP Jackson Street would become like the Hutt CBD

Submission twenty two

· Supports proposal

· View the JSP and its activities as a benefit to the businesses in Petone

Submission twenty three

· Supports the program extension plan – no reason or explanation given

Submission twenty four

· Business is out of area so not subject to targeted rate but organizes the annual Christmas Grotto

· Does not state if they are for or against the proposal

· Does highlight the importance of the work that JSP does in bringing people to the Christmas event and thus to Jackson Street and around

Submission twenty five

· Supports the extension of the JSP footprint

· Cites increased networking and diversity, and the ability for more businesses to have a say as the reasons for this support.

Submission twenty six*

· Support the increase in footprint

· JSP has increased Petone’s profile and promoted what businesses have to offer both on and around Jackson Street.

· The events run by JSP have been recognized regionally and the heritage offerings are free for all to see

Submission twenty seven

· In support of the proposed extension

· Believes that all Petone Businesses benefit from the events and activities run by JSP and the extra people who come to the area for them.

· Believes that an expanded footprint would provide much needed funds to assist with the increasing work-load that the JSP is facing and is a better option than increasing the rate amount and more reliable than grant funding.

Submission twenty eight*

· Does not support the proposal

· Objects as there is no commercial gain for businesses outside Jackson Street in particular service based businesses on side streets.

· Concerned about lack of time to submit and lack of notification as a building owner

Submission twenty nine

· In favour of expansion

· Notes the welcome received from JSP as a new business owner to Jackson St a few years ago

· Important to grow and expand footprint to accommodate diverse Petone offerings

Submission thirty

· Supports the program extension plan – no reason or explanation given

Submission thirty one

· Business owns a warehouse in proposed expansion zone.

· As business is not retail it will therefore not benefit thus they object to proposal.

Submission thirty two

· Does not agree with extension

· Is concerned about small home based businesses and want to know if their value goes down does the levy reduce

Submission thirty three

· Against proposal, thinks area should be left as is and focused on Jackson Street

165 11 June 2019

Community Plan Committee

13 May 2019

File: (19/631)

Report no: CPC2019/3/58

Recommendation from the City Development Committee - Hutt Valley Tennis

Purpose of Report

1. For the Community Plan Committee to consider the recommendations from the City Development Committee meeting held on 30 April 2019 in relation to Hutt Valley Tennis.

Recommendations

That the Committee:

(i) considers an additional budget provision of $850,000 for Hutt Valley Tennis; and

(ii) notes that any actual financial commitment to Hutt Valley Tennis will be subject to key conditions as outlined in this paper.

Background

2. The City Development Committee, at its meeting held on 30 April 2019, recommended the following:

recommended: (Deputy Mayor Bassett/Cr McDonald) Minute No. CDC 19206

“That the Committee recommends that the Community Plan Committee:

(i) considers an additional budget provision of $850,000 for Hutt Valley Tennis; and

(ii) notes that any actual financial commitment to Hutt Valley Tennis will be subject to key conditions as outlined in this paper.”

3. At the same meeting, the City Development Committee recommended the following:

RECOMMENDED: (Deputy Mayor Bassett/Mayor Wallace) Minute No. CDC 19216

Discussion

4. The officer’s report presented to the City Development Committee is attached as Appendix 1 to the report.

5. This report is the result of a request in January 2019, made by Hutt Valley Tennis (HVT) to Council for $850k of funding, in addition to the $500k already allocated in previous Long Term Plans (Council previously approved two amounts of $250k to HVT for two separate and different submissions which were based on information current at the time).

6. If Council approves this sum and the release of the previously allocated $500k, funds will go to the completion of a build project on the Mitchell Park site, with a budget of $2.19M. Works completed will strengthen and re-orient the existing pavilion to the northeast, demolish two squash courts and install a four court fabric tensile membrane court structure (refer to Appendix 1).

Tennis Background

7. Tennis New Zealand reported 34,557 club members nationally. In addition there were 24,683 casual and programme participants. There were also 60,561 primary school children participating in the ‘Tennis Hot Shots’ programme. More than 300,000 New Zealanders enjoy tennis.

8. HVT is the sub-regional association responsible for the delivery of Tennis across Lower Hutt. The association is based at Mitchell Park, has nine affiliate clubs (seven in Lower Hutt) and acts as the base for a handful of coaching businesses and a pro-shop. It is estimated that the centre attracts 50,000-60,000 visitors annually. There are currently 1038 tennis club members affiliated to the centre; 884 across Lower Hutt clubs. This number is down on the previous year (1108) and while considering ebbs and flows, tennis club membership and the national participation picture both show a steady downward trend over the last decade. In 2010 HVT had 1286 members (all figures from Tennis Central Annual reports). Hutt Valley Tennis aligns to Tennis New Zealand as the national governing body of the sport.

9. The broader context of Tennis in our city shows a wide variety of Tennis facilities including our club sites, school courts and 16 free to use community courts across the region.

10. As outlined in Appendix 2, Tennis faces a range of future challenges to its viability. A long period of steady decline by most measures enables us to predict more decline over time and points to the need to attract new partners and create innovative streams of revenue.

11. HVT has a long and storied history in our city. The centre hosts up to 60,000 visitors a year and plays an important role in the development of local tennis players. Hutt Valley currently boasts New Zealand’s top junior in George Stoupe.

Strategy Background

12. To put this request in a strategic context, the two key relevant strategies for council are the Leisure and Wellbeing Strategy and the Long-Term Integrated Community Facilities Plan (LTICFP). The objective of the Leisure and Wellbeing Strategy is to improve the lives of residents by “providing world class and fit for purpose integrated community services. The strategy provides a framework to achieve Council’s vision of a city that is a great place to live, work and play”.

13. This framework is structured around: 1) integrated community facilities; 2) improving outcomes in the North East; 3) children and young people; and 4) community safety. All parties agree that the proposed development will move Mitchell Park closer to being “world class and fit for purpose”. There is potential for community utility through the provision of a covered activities space and improved communal spaces, but the facility design itself has been prepared for Tennis rather than broader community utility.

14. In the LTICFP, Council aspires to “a series of integrated community hubs that cluster civic, social and sporting facilities into more user-friendly, efficient and well utilised centres that fit the needs of the communities that make up Lower Hutt now and into the future’. At the time of submission to the City Development Committee (CDC), alignment to the LTICFP appeared unclear to Council officers. Since that time, HVT and Council officers have been busy identifying and connecting with partners that might support Mitchell Park in performing the function of an ‘integrated’ venue.

15. From a wider strategy standpoint, Sport New Zealand is the governing body for sport in New Zealand. Their facilities framework aims to bring about “…better planning and design of sports facilities around New Zealand, by encouraging sport organisations to plan and to share resources and facilities [In a way which] reduces costs and provides better services for participants”. There is clear alignment between our LTICFP and this national document.

16. In 2018 Tennis New Zealand (TNZ) completed its national facilities guidelines. Under these guidelines HVT is a sub-regional association and as such “…complements Regional Tennis Centre facilities where population catchments warrant additional courts and a sustainable business model can be achieved”. Tennis NZ have submitted a letter of support for this project on the basis that the venue will provide “…endless opportunities to a broad spectrum of the Hutt Valley community”, and that “Tennis Central is at present under-served by the number of courts available”. TNZ’s national facilities strategy contends that the region is already well-served with indoor courts.

17. Against the context of the TNZ facilities strategy Sport NZ have advised Council that to ensure the best decisions for Tennis both in terms of the Hutt Valley and the wider region “it is important to take a network view of the current supply of tennis facilities and map them against both current demand, likely population growth and the ability to share facilities with other organisations”. All parties contend that there is currently no undersupply of Tennis facilities in the City.

Objectives:

18. HVT aims to address two problems through this submission:

· a currently unsafe pavilion; and

· an unsustainable business model.

19. In September 2018, and based upon an engineer’s report by Sawreys, the Mitchell Park Pavilion was deemed by Council to be an earthquake prone building, meaning that HVT have 15 years to make repairs. Based upon recent engineers reports which show the expected repair costs for the pavilion at $300-$350k, HVT are now in a position to make their building safe through the funds already allocated in previous LTP cycles or through cash reserves, which have been carefully managed and grown through a development levy.

20. The move by Mitchell Park Squash to Fraser Park Sportsville to take up the offer of improved facilities has compromised the operations of Hutt Valley Tennis due to a shared expenses model, and leaves an annual budget shortfall of around $50k for the association. HVT propose that the revenue lost by the departing squash club should be replaced through funds generated by delivering Tennis. They contend that the best way to do so is through the provision of a new indoor tennis venue.

21. Following the CDC meeting on 30 April, questions remained regarding the popularity of indoor tennis in the Hutt Valley and how this might translate in demand and usage patterns for both 2 and 4 court developments. There were also questions regarding precedent and usage trends for Tennis elsewhere in the country. HVT have done a lot of work of work in these areas as well as assumptions and workings on all operational costs - this as well as demand modelling as it relates to this project are visible in Appendix 2, 3 and 4.

22. This detailed modelling shows that a two court model shows a deficit of $31,500 – which relates to around $30 per affiliated member in passed on costs. A four court facility shows a profit at $61,000 ($0).

23. HTV have gone to a great extent to ensure that pricing is set at an appropriate level to simultaneously attract new users, but not eat into the percentage of existing club members by being too low. HVT intend to offer any new venue to a range of affiliated user groups for free and discounted use to professional coaches with bulk bookings.

24. HVT is now showing a commitment to partnering organisations that can add value to the Mitchell Park operating model or increase the value of the site to the community as to ensure that the site is a ‘multi –use, multi- user’ community hub (in line with 9,10,11,and 12). It is possible that by time of consideration HVT may have letters of intent from, in particular, public facing health services. Work continues in the background to form partnerships with other community and/or sport organisations. Appendix 3 shows the current status of a number of these discussions.

25. The departure of Mitchell Park Squash and the process of assessing the seismic vulnerability of their pavilion have put HVT in an extremely uncertain position for many years. HVT should be commended for having worked tirelessly throughout for the betterment of their membership. Association volunteers have committed hundreds of hours of work to ensuring that their sport can thrive beyond the current challenges that they face and provide a sustainable operating base for their membership.

26. With the great news that the pavilion repair will cost significantly less than expected, the key challenge facing HVT is now to secure a financial and operating model which returns a positive balance sheet year to year. The model that they have submitted shows that a four court covered canopy development is a way to achieve that.

27. There has been much discussion between officers and HVT regarding how ‘complementary shared use’ may support HVT in achieving their financial goals. Developing an operating model which creates new streams of income and adds broader community utility will enable HVT to align with our LTICFP and other relevant strategies and will help to mitigate the decline of Tennis itself.

28. Based upon demand modelling (Appendix 2) we can deduce that there are around 352 individuals in the city that will be willing to pay for casual use of the new venue (population x intend to play tennis x willingness to pay). This correlates well with current court hire rates and estimates by Tennis central regarding the level of casual play in the region. We do not believe that this user-group will generate enough income to support the model submitted, which targets four to eight bookable ‘walk-in’ hours a day.

29. The model presented has limitations in that it shows a best case scenario of summer usage and does not capture the ebbs and flows of seasonal demand for Tennis. (Appendix 2 shows that tennis participation can decline from its peak as much as 50% during a calendar year). We also believe that while a four court canopy would host tournament play and large groups, most aspects of the bookings could fit into a two court schedule.

Risk

30. The existing model is one by which tennis, with the support of a range of other funders, has funded the development of their asset over time with minimal ratepayer investment. The Centre has and will continue to deliver many important outcomes for tennis participation in our community. HVT are currently running at a loss of around $4,000 per month. While cash reserves are healthy, they need a more permanent solution to their negatively gearing.

31. HVT’s Pavilion is vulnerable from a seismic standpoint and classified by Council as such. Action needs to be taken should they choose to continue to occupy the building.

32. HVT volunteers are adamant that unless the submitted project is approved for funding, the future of the game in our city is at stake. This is because volunteers have been working extremely hard for a long time and without a home, association volunteers will devolve back into the club structure forcing the association to fold. Should HVT fold, conversations with Tennis Central and Tennis NZ would likely return the operation of representative and the development pathway to the local network of clubs. This chain of events is generally endorsed as a likely outcome by the tennis community.

33. The dissolution of HVT could have implications for the player development pathway in our region, although it needs noting that in general most player development is delivered in the Hutt Valley by paid professional coaches who are typically club based.

34. In choosing not to fund this project, Councillors should consider the potential impact upon the player development pathway and the structure of tennis in the region. HVT personnel indicate that not funding the project could lead to the demise of the organisation and a return of collected development levies to the clubs as well as responsibility for game development. Officers contend that should HVT formally secure a range of partnerships which support the venue as an integrated “multi-use, multi- user” venue, then supporting a four court canopy structure should be considered by Council, as it will give HVT a strong opportunity to maximise their asset for the betterment of the entire community. Taking these actions will also protect the viability of the venue against likely future decreases in demand for Tennis. We can currently show unmet demand for a venue of this type within the wider community.

35. Officers, also believe that a two court canopy, over time, can work for HVT although it presents a weaker ongoing business case and will require a lot of work to fine-tune their operating model. We believe that an investment at this level will give tennis the opportunity to socialise their project with commercial and grants funders or take a phased approach. As such, we are seeking direction and decision from elected members.

36. Officers agree that the four court option give HVT a better opportunity to: a) bring new users and increased activity to the site; b) realise commercial partnership opportunities through an improved visual appeal; and c) financial stability through improved turnover and generally put HVT in a better position to maximise the value of its assets.

Options

37. Agree to fund additional contribution of 850k (total 1.35M). Improves the business model by providing greater revenue potential however this potential may be difficult to achieve without wider community partnerships.

38. Decline additional funding but agree to fund at current level of 500k. HVT would be responsible for raising additional funding to achieve either two court or four court development which HVT have indicated they are unlikely to be motivated to achieve.

39. Remove all funding due to other competing demands. HVT have indicated this may result in the dissolution of HVT as an organisation.

40. Push back funding to a later date. HVT have indicated it would not support this due to current operations are negatively geared.

41. An alternative option as agreed by Council.

Other Considerations

42. Should budget provision be made for this, any actual financial commitment of Council should be subject to various conditions including and not limited to:

a) Formal approval of a final design concept.

b) Evidence and comfort regarding the budget and in particular with regards to a final construction cost, and confirmed or committed fundraising (cash and in-kind).

c) Evidence and comfort of the construction programme and methodology.

d) Formal approval of a project governance structure.

e) A senior Council officer(s) sitting on an appropriate Project Control Group.

f) Formal approval of a business case that demonstrates the ongoing operational sustainability and maintenance of the facility by HVT.

Appendices

No.	Title	Page
1 ⇩	Hutt Valley Tennis City Development Committee Report	166
2 ⇩	Mitchell Park Sample Bookings Schedule	185
3 ⇩	Mitchell Park Draft Operating Model	186
4 ⇩	Demand Modelling for Hutt Valley Tennis	193

Author: Mark Curr

Sport and Recreation Programmes Manager

Reviewed By: Marcus Sherwood

Divisional Manager, Parks and Recreation

Approved By: Matt Reid

Acting Chief Executive/General Manager City and Community Services

Attachment 1

Hutt Valley Tennis City Development Committee Report

City Development Committee

02 April 2019

File: (19/416)

Report no: CDC2019/2/68

Hutt Valley Tennis

Purpose of Report

1. This report provides information on the proposed development on the Hutt Valley tennis site at Mitchell Park as proposed by Hutt Valley Tennis (HVT) officers.

2. It also provides a high level outline of relevant data and strategies which should be considered by Council and the Committee when evaluating this funding request.

Recommendations

That the Committee:

(i) notes and receives the report;

(ii) recommends that the Community Plan Committee:

(a) considers an additional budget provision of $850,000 for Hutt Valley Tennis; and

(b) notes that any actual financial commitment to Hutt Valley Tennis will be subject to key conditions as outlined in this paper; and

(iii) notes that any actual financial commitment would be subject to various conditions being satisfied as outlined in this paper.

Background

3. This report is the result of a request in January 2019, made by Hutt Valley Tennis to Council for $850k of funding, in addition to the $500k already allocated in previous Long Term Plans (LTP). Council previously approved two amounts of $250k to Hutt Valley Tennis for two separate and different submissions which were based on information current at the time.

4. If Council approves this sum and the release of the previously allocated $500k, funds will go to the completion of a build project on the Mitchell Park site, with a budget of $2.19m. Works completed will strengthen and re-orient the existing pavilion to the northeast, demolish two squash courts and install a four court fabric tensile membrane court structure (Appendix 1 and 2).

5. To put this request in a strategic context, the two key relevant strategies for Council are the Leisure and Wellbeing Strategy and the Long-Term Integrated Community Facilities Plan (LTICFP). The objective of the Leisure and Wellbeing Strategy is to improve the lives of residents by “providing world class and fit for purpose integrated community services. The strategy provides a framework to achieve Council’s vision of a city that is a great place to live, work and play”. This framework is structured around: 1) integrated community facilities; 2) improving outcomes in the North East; 3) children and young people; and 4) community safety. All parties agree that the proposed development will move Mitchell Park closer to being “world class and fit for purpose”, but with the exception of the coaching that takes place at the site, it is difficult to see a clear alignment between the broadest intentions of the strategy and the proposed development.

6. In the LTICFP, Council aspires to “a series of integrated community hubs that cluster civic, social and sporting facilities into more user-friendly, efficient and well utilised centres that fit the needs of the communities that make up Lower Hutt now and into the future’. While these aspirations have not been explored fully as yet, there is a willingness to adopt a working approach towards ensuring that Mitchell Park can perform the function of an ‘integrated’ venue. The lengthy partnership between Squash and Tennis on the site as well as the co-sharing of nine clubs on the site are evidence of this.

7. From a wider strategy standpoint, Sport New Zealand is the governing body for sport in New Zealand. Their facilities framework aims to bring about “…better planning and design of sports facilities around New Zealand, by encouraging sport organisations to plan and to share resources and facilities [In a way which] reduces costs and provides better services for participants”. There is clear alignment between our LTICFP and this national document.

8. Alignment to the Tennis New Zealand (NZ) facilities strategy is discussed in paragraph 17.

9. This is an important conversation for Council given the scale of the request. It is worth noting that the centre hosts up to 60,000 visitors a year and is an important facility in the development of local tennis players.

Objectives:

10. Hutt Valley Tennis aims to address two problems through their submission:

· a currently unsafe pavilion; and

· an unsustainable business model.

11. In September 2018, based upon an engineers’ report by Sawreys, the Mitchell Park Pavilion was deemed by Council to be an earthquake prone building, meaning that HVT have 15 years to make repairs. Based upon recent engineers reports which show the expected repair costs for the pavilion at $300-$350k, Hutt Valley Tennis are now in a position to make their building safe through the funds already allocated in previous LTP cycles or through cash reserves, which have been carefully managed and grown through a development levy.

12. Secondly, the move by Mitchell Park Squash to Fraser Park Sportsville to take up the offer of improved facilities has compromised the operations of Hutt Valley Tennis due to a shared expenses model, and leaves an annual budget shortfall of around $50k for the association. Hutt Valley Tennis propose that the revenue lost by the departing squash club should be replaced through funds generated by delivering Tennis. They contend that the best way to do so is through the provision of a new indoor tennis venue.

Discussion

13. The draft business model to accompany HVT’s request was submitted at the beginning of April and is attached as Appendix 3. The viability of these figures, specifically where demand is concerned needs to be explored more fully.

14. Hutt Valley Tennis volunteers are adamant that unless the submitted project is approved, the future of the game in our region is at stake. This is because without a home, association volunteers will devolve back into the club structure and the association will fold. Given the scale of the request, this notion needs to be explored more fully alongside the sport and tennis communities.

15. The broader context of tennis in our city shows oversupply of tennis facilities. Hutt Valley Tennis is the sub-regional association responsible for the delivery of Tennis across Lower Hutt. The association is based at Mitchell Park, has nine affiliate clubs (seven in Lower Hutt) and acts as the base for a handful of coaching businesses and a pro-shop. It is estimated that the centre attracts 50,000-60,000 visitors annually. There are currently 1038 tennis club members affiliated to the centre; 884 across Lower Hutt clubs. This number is down on the previous year (1108) and while considering ebbs and flows, tennis club membership and the national participation picture both show a steady downward trend over the last decade. In 2010 HVT had 1286 members (all figures from Tennis Central Annual reports).

16. There are currently 56 courts in the Hutt Valley across all clubs and the HVT site (with three additional courts adjoining clubs which are maintained by Council). This on average gives a ratio of 18.5 members per court, including Mitchell Park. Membership ratios per court are important to give an understanding of how many regular players the tennis community has, and can project for, both in terms of a revenue source via membership levies, and in terms of ensuring adequate provision of facilities to enable all members to successfully participate in the sport. It provides a baseline to gauge whether the current provision is appropriate for the number of registered members. Tennis NZ suggest that communities need one court per 2000 to 2500 people which suggests that 42-51 courts will cater to our community.

17. Against the context of the Tennis NZ facilities strategy, this shows an oversupply of courts for our region, and is unsustainable. In light of this, Sport NZ have advised Council that to ensure the best decisions for Tennis both in terms of the Hutt Valley and the wider region “it is important to take a network view of the current supply of tennis facilities and map them against both current demand, likely population growth and the ability to share facilities with other organisations. Based on the current number of facilities this may require some difficult conversations but would ensure the sustainability of facilities for tennis in the long term”.

18. This table represents the minimum standards that sub-regional associations should aim against the current picture in our region:

Guideline	Hutt Valley Tennis
8 courts, of which 6 courts are ITF approved dimensions and hard court surface		13 courts of approved dimensions, all astroturf.
75% courts floodlight to club competition standard (350 lux)		All courts are floodlit
Ideally every New Zealand city to have two fit for purpose covered or indoor courts accessible to the tennis community and for year round athlete development		Currently no covered courts in the Hutt Valley
Venues in close proximity may collaborate to run tournaments and support athlete training - All courts should be in a good state of repair		13 courts limits the need for venue sharing. All but 2 courts at Mitchell park are in very good condition.

The full document is visible here

http://tennis.kiwi/About/Policies-and-Reports/Tennis-NZ-Facilities-Guidelines

19. Hutt Valley Tennis aligns to Tennis New Zealand as the national governing body of the sport. In 2018 Tennis New Zealand completed its national facilities guidelines. Under these guidelines HVT is a sub-regional association and as such “…complements Regional Tennis Centre facilities where population catchments warrant additional courts and a sustainable business model can be achieved”.

20. The departure of Mitchell Park Squash (MPS) and the process of assessing the seismic vulnerability of their pavilion have put Hutt Valley Tennis in an extremely uncertain position for many years. Hutt Valley Tennis should be commended for having worked tirelessly throughout for the betterment of their membership. Association volunteers have committed hundreds of hours of work to ensuring that their sport can thrive beyond the current challenges that they face and provide a sustainable operating base for their membership.

With the great news that the pavilion repair will cost significantly less than expected, the key challenge facing Hutt Valley Tennis is now to secure a financial and operating model which returns a positive balance sheet year to year. The model that they have submitted shows that a four court covered canopy development is a way to achieve that. Work needs to be done to understand if Tennis demand alone will support this model, particularly in light of the decline of tennis locally and nationally.

All parties have been aware of the pending departure of MPS since 2014, where a report was completed by Council’s Divisional Manager, Community Hubs on the matter. In this report, which was accepted by HVT, a number of recommendations were made to explore different operating models. Due to the more immediate nature of the pavilion’s seismic vulnerability, exploring this work has stayed on the backburner for all parties.

Sport NZ has urged Council officers to “take a network view of Tennis in the region prior to any new development”. Doing so requires us to understand the bigger picture of the role that Hutt Valley Tennis plays regionally, and the access that residents have to a range of tennis experiences. The conclusion of fewer players can be misleading, as club membership statistics typically are not fully representative of all tennis players so we need the time to be more accurate with this.

There has been much discussion between officers and HVT regarding how ‘complementary shared use’ may support HVT in achieving their financial goals. Developing an operating model which creates new streams of income and adds broader community utility will enable HVT to align with our LTICFP and other relevant strategies.

Options

21. At present there are a range of uncertainties regarding the submitted project, which make it difficult to understand how a new indoor Tennis facility might operate. As such, we are seeking direction and decision from elected members.

22. Council officers and HVT volunteers disagree whether tennis in the region needs a two or four court canopy, and given the very recent reframing of the problem, it will be important to explore this more fully. Officers acknowledge that a four court model certainly strengthens HVT’s ongoing business case.

23. Should the Committee and Council be satisfied that this project aligns to our strategic direction, it will be important to explore the relative economic benefits and constraints of variations of the request. This includes:

· not funding any further development on the Mitchell Park site;

· a pavilion improvement project only;

· a pavilion improvement project with a two court canopy structure; or

· a pavilion improvement project with a four court canopy structure.

24. As mentioned, a draft business model has been submitted by HVT volunteers (Appendix 3) to depict how these options might translate into business as usual. During May, Council officers intend to work with HVT personnel to understand:

· what happens if Council does/does not fund this request;

· the demand for indoor tennis in the Hutt Valley;

· the costs, benefits and constraints of the project;

· options for operating models;

· whole-of-life facility costs; and

· all appropriate sensitivities (population etc,)

Other Considerations

25. Should budget provision be made for this, any actual financial commitment of Council should be subject to various conditions including and not limited to:

a) formal approval of a final design concept;

b) evidence and comfort regarding the budget and in particular with regards to a final construction cost, and confirmed or committed fundraising (cash and in-kind);

c) evidence and comfort of the construction programme and methodology;

d) formal approval of a project governance structure;

e) senior Council officer(s) sitting on an appropriate Project Control Group; and

f) formal approval of a business case that demonstrates the ongoing operational sustainability and maintenance of the new facility by HVT.

26. In making this recommendation, officers have given careful consideration to the purpose of local government in section 10 of the Local Government Act 2002. Officers believe that this recommendation falls within the purpose of local government.

Appendices

No.	Title	Page
1	HVT Appendix 1 Proposal
2	HVT Appendix 2 Draft Project Budget and Design
3	HVT Appendix 3 Draft Business Model

Author: Mark Curr

Sport and Recreation Programmes Manager

Approved By: Matt Reid

General Manager City and Community Services

223 11 June 2019

Community Plan Committee

14 May 2019

File: (19/608)

Report no: CPC2019/3/104

Recommendation from the Community Services Committee - Bell Park

Purpose of Report

1. For the Community Plan Committee to consider the recommendations from the Community Services Committee meeting held on 2 May 2019 in relation to Bell Park.

Background

2. Ignite Sports Trust (the Trust) has previously submitted a proposal seeking to work with Council on a landscape development plan for Bell Park (the Park). A part of that proposal is, among other things, to develop an all-weather hard court surface. This proposal was considered along with other submissions made during public consultation period in 2017 when Council was considering development options for the Park.

3. The Trust is in negotiations to purchase the only building on the Park from the LH Association Football Club. Negotiations are well advanced.

4. The Community Services Committee, at its meeting held on 2 May 2019, recommended the following:

ReCOMMENDED: (Cr Barratt/Cr Briggs) Minute No. CSC 19206

“That the Committee recommends to the Community Plan Committee that it considers a budget provision of $250,000 towards the cost of a hard court surface area at Bell Park as attached as Appendix 2 to the report.”

5. At the same meeting, the Community Services Committee recommended the following:

Recommended: (Cr Barratt/Cr Lulich) Minute No. CSC 19209

“That the Committee:

(i) notes the updates contained in the report; and

(ii) notes officers’ concerns in terms of future funding of Significant and Capital Projects and recommends that the Community Plan Committee considers that given the recent closure of the Naenae Pool and Gym complex and the likelihood for significant new capital funding being required, that any actual and final commitment to other projects be subject to a solution, including the funding of Naenae Pool and Gym. This will allow Council to discuss financial parameters around the provision of a new facility, or remediation of the current structure for the community of Naenae.”

Discussion

6. The officer’s report and the Bell Park Landscape Concept reported to the Community Services Committee are attached as Appendix 1 to the report.

7. Preliminary construction costs for a hard court area, based on similar projects delivered by Council are broadly estimated at $250,000 depending on the final scope of works.

8. The future of Bell Park was publicly consulted on in 2017, as a part of Council’s review of reserve land. The main outcome from that consultation was that a majority of the respondents want to see the Park retained as a neighbourhood reserve for open space recreation activities and to develop it further, for example, by constructing tracks, a hard court area, bbq and picnic space. This consultation also concluded that the public, particularly the local community, is supportive of the Trust’s use of the Park.

9. The building purchase along with the proposal to construct a hard court area has numerous benefits. It would enable the Trust to consolidate its operations at the Park; and ensure a more effective use of its time and resources in delivering its youth focused community initiatives, notably reducing travel time between sports venues as is currently the practice. The benefits to the wider community include an increase in use, an improvement in safety and visibility for casual users, as well as providing extra sports and recreation facilities.

10. With 50% of the programmes requiring the use of court space, it is obvious that a development at Bell Park will significantly improve the Trust’s operations. Without the courts, the benefits to the Trust in purchasing and relocating are less favourable as travelling to and from sports facilities around the region will still be required.

11. The Park is no longer used for seasonal sports and is maintained as a neighbourhood reserve. The proposal to construct courts will improve the Park’s usefulness and result in better use of the space. The Trust will use the courts every day during the week, usually between 10am – 3pm. The public will have access at all other times.

12. The proposal from the Ignite Sport Trust is exciting in that it would see the park space activated, allowing for both local and city-wide use. It will require some investment beyond the $250,000 to enable the installation of, for example, a picnic area, bbq and tracks, but these could be addressed over a number years using operational funding.

13. The Trust has indicated that its funding options will be exhausted in purchasing the building and undertaking earthquake strengthening work.

14. The construction of a court does not compromise wider use by the public of the reserve. The ideal court dimensions will measure 32m x 40m, an area of 1,280m² or around 9% approximately of the functional grassed area of reserve space depending on final scope of works.

15. While officers are supportive, when considering this proposal alongside other funding requests, officers assess it as having a medium/low priority.

Options

16. The Committee can recommend that Council:

(a) commits $250,000 in 2019/20 towards the construction of a hard court area, subject to the Trust successfully purchasing the building; or

(b) commits $250,000 in three to five years towards the construction of a hard court area, subject to the Trust successfully purchasing the building; or

(c) declines the request and continue to maintain the Park as a neighbourhood reserve. The Trust could be invited to re-submit the proposal at a later date, although this proposal has already been before Council a number of times.

Consultation

17. Council has sought the views of the community on the future of Bell Park both locally and city-wide. The results of the feedback were reported to Council in 2017 with support for the retention of Bell Park as a neighbourhood reserve, and to further develop the reserve to make it more relevant and useful.

Legal Considerations

18. There are no legal considerations at this time.

Financial Considerations

19. The construction of a hard court area that is functional is estimated broadly at $250,000.

20. There is currently no funding provision in the Long Term Plan for any improvements to Bell Park.

21. Council could reconsider the sale of a part of Bell Park for limited housing development to provide funding for both the hard court and the balance of the reserve. However, public consultation undertaken in 2017 showed a strong desire to retain the park as a reserve, and this option is unlikely to be supported by local residents. Council has previously decided to retain the reserve status.

22. The Trust will invest in excess of approximately $550,000 in purchasing the building and undertaking necessary improvements to address deferred maintenance items and converting the building to suit.

Other Considerations

23. In making this recommendation, officers have given careful consideration to the purpose of local government in section 10 of the Local Government Act 2002. Officers believe that this recommendation falls within the purpose of the local government in that it considers the future of a Council owned community asset.

Appendices

No.	Title	Page
1 ⇩	Community Services Committee Report - Proposal to Issue a Lease at Bell Park - Ignite Sports Trust - 2 May 2019	224

Author: Aaron Marsh

Team Leader Parks

Reviewed By: Marcus Sherwood

Divisional Manager, Parks and Recreation

Approved By: Matt Reid

Acting Chief Executive/General Manager City and Community Services

Attachment 1

Community Services Committee Report - Proposal to Issue a Lease at Bell Park - Ignite Sports Trust - 2 May 2019

Community Services Committee

16 April 2019

File: (19/483)

Report no: CSC2019/2/75

Proposal to Issue a Lease at Bell Park - Ignite Sports Trust

Purpose of Report

1. The purpose of this report is to seek approval to issue a lease to Ignite Sports Trust for a part of Bell Park

Recommendations

It is recommended that the Committee:

(i) notes that Ignite Sports Trust is interested in the purchase of the Lower Hutt Football Club building located on Bell Park and is negotiating with the owners, the Lower Hutt Association Football Club;

(ii) notes that without commitment from Council to issue a lease of reserve land, Ignite Sports Trust is unable to continue to proceed to the purchase of the building;

(iii) notes that the request is consistent with Council policy;

(iv) agrees to issue a lease for the area attached as Appendix 1 to the report to Ignite Sports Trust for a term of 30 years; and

(v) recommends to the Community Plan Committee that it considers a contribution towards the cost of a hard court surface area as attached as Appendix 2 to the report.

For the reasons outlined in the report.

Background

2. In December 2017, following community consultation, the decision was made to retain Bell Park as recreation reserve and operate it as a neighbourhood park. Previously it had been used as a sports ground for football, but with the relocation of the Lower Hutt City Football Club to Fraser Park that use has since ceased. In its current state it offers little amenity value to residents and users, with no footpaths, gardens or other features. The park also suffers from poor drainage in some areas, limiting its use for part of the year.

3. In December 2017, Ignite Sports Trust (the Trust) approached Council in order to gain support for a proposal to purchase the football club buildings from the Lower Hutt Football Club and re-locate its activities to Bell Park. Residents and officers are generally supportive of this proposal.

4. In order that the Trust can continue with the sale and purchase process, it is seeking approval from Council to issue a lease for a part of Bell Park

Discussion

5. Established in 2001, the Trust is predominantly a youth development organisation using sport and recreation to engage and encourage young people to achieve their full potential and to make a positive impact on their lives. The Trust mentors over 900 kids and young people annually to reinforce important life skills. It also delivers community programmes and events where over 4000 people have benefited.

6. Currently located in the service centre in Petone, the Trust for the past two years has been looking to consolidate its operations in one building and on one site. The Trust has identified Bell Park and the (former) Lower Hutt Football Club building as the ideal location for its operations.

7. The Trust has been negotiating with the football club to purchase the building and is in the final stages of making an offer. The Trust is keen to formalise a final offer and intends to do so subject to a condition that a lease of land from Council is forthcoming.

8. The issuing of a lease is predominantly for the footprint of the building although, in anticipation of developing a hard court area in the future, it is proposed to include an area of reserve immediately to the north of the building.

9. The presence of the Trust on Bell Park would have numerous benefits. It would enable the Trust to carry out its activities much more effectively and efficiently, notably reducing the travel time between sports venues. The benefits to the wider community include an increase in use of the reserve, thereby improving safety and visibility for casual users, as well as providing extra sports and recreation facilities.

10. Bell Park measures approximately 15,500m². The land is vested in Council as a recreation reserve under the Reserves Act 1977. The Park has an activity zoning of General Recreation under the District Plan. A site plan of the proposed lease area is attached as Appendix 1 to the report.

11. The proposed lease area measures 1,200m² (more or less) being 7.7% of the total reserve area. The issuing of a lease to the Trust will have no impact on the public’s use of the balance of the Park.

12. The Trust has previously sought funding from Council for the development of a hard court surface area which was a part of the draft landscape plan publicly consulted on in 2018. At that time the estimated cost for the courts was $250,000. The landscape plan is attached as Appendix 2.

13. While Officers are in support of the hard court in principle, and as such have included it within the overall park development plan, we have not assessed it as a high priority for a Council capital contribution within the next three years considering other funding pressures.

Options

14. The Committee could:

a. Decline the request to issue a lease. This is viewed unfavourably by officers. Such a move is seen as unsupportive of the good work that the Trust undertakes in the community. It also has an impact on the football club in that it will not be able to realise any value in the building.

b. Approve the request. Approval will ensure the Trust centralises its operations and continues to deliver its community focused sporting programme. Approval also allows the football club to surrender the current lease.

Consultation

15. Community consultation was undertaken in 2018 when Council reviewed what to do with the Park. That consultation and subsequent meetings with local neighbours showed, among other things, support for the Trust to locate its operations at the Park.

16. To ensure proper legislative process is followed and despite consultation undertaken already, officers propose to advertise Council’s intention to issue a lease. This will be advertised in the Hutt News in May. The purpose of the advertisement is to provide an opportunity for members of the public to make a submission on the lease proposal. Officers will report back to Council the results of the advertisement should submissions be received that are not in support of the proposal and/or where any submissions cannot be addressed or resolved.

17. In the absence of objections it is proposed that the issuing of a lease be processed according to the resolution sought in this report.

Legal Considerations

18. Council is guided by the requirements of the Reserves Act 1977. The proposal and process satisfies the statutory provisions.

19. Council’s generic reserves lease document will be used for this proposal.

20. It is proposed that a lease term of 30 years be approved. This length of lease will provide security for the Trust in terms of its likely significant investment to purchase the building.

21. The football club will surrender its lease of land should an agreement on sale be reached between the Trust and the club. This surrender is required prior to the issuing of any lease.

Financial Considerations

22. In accordance with Council’s Reserve Rental Policy, the Trust will be required to pay a lease charge of approximately $1,200 + GST per year.

23. The anticipated costs for a hard surface area are estimated at $250,000. Depending on the final scope of works this cost may be less.

Other Considerations

24. The Sportsgrounds Reserves Management Plan guides the use, maintenance and development of the reserves for which a lease or licence is being sought. The proposal to issue a lease to the Trust is in accord with the policies and objectives of the Plan

25. In making this recommendation, officers have given careful consideration to the purpose of local government in section 10 of the Local Government Act 2002. Officers believe that this recommendation falls within the purpose of local government in that it considers the future of a Council owned community asset.

Appendices

No.	Title	Page
1	Proposed Lease Area - Ignite Sports Trust - Bell Park (not attached)
2	Bell Park Landscape Concept 1

Author: Aaron Marsh

Team Leader Parks

Approved By: Marcus Sherwood

Divisional Manager, Parks and Recreation

Attachment 1

Community Services Committee Report - Te Whiti Park Proposed Extension - 2 May 2019

Community Services Committee

24 April 2019

File: (19/515)

Report no: CSC2019/2/84

Te Whiti Park Proposed Extension

Purpose of Report

1. The purpose of this report is to provide feedback on a request by the Te Aroha Sports Association (the Association) to include budget in the 2019/2020 Annual Plan, to complete the sports pavilion at Te Whiti Park by extending the new changing rooms to include a multipurpose space for club and community use.

Recommendations

It is recommended that the Committee:

(i) notes that officers have been in discussions for some years with the Te Aroha Sports Association with regard to a concept development plan for Te Whiti Park;

(ii) notes that a part of the Plan is the construction of a new changing room facility, which has been completed;

(iii) notes that a multi-purpose utility room was a part of the agreed changing room facility design but this was not constructed;

(iv) notes that the Association is seeking a one third funding commitment from Council to complete construction of the multi-purpose room as originally proposed; and

(v) recommends that the Community Plan Committee:

(a) considers a budget provision of $300,000 for a contribution towards completion of the sports pavilion at Te Whiti Park; and

(b) notes that any actual financial commitment would be subject to Te Aroha Sports Association raising the balance of funding for the completion of the project.

For the reasons outlined in the report.

Background

2. Officers and members of the Association since 2009 have held numerous meetings to discuss and agree on a concept development plan for Te Whiti Park. This is attached as Appendix 1.

3. The agreed plan adopted in 2013 provided for, among other things, the demolition of the old changing rooms, increased car parking access, internal walkway and access improvements, and the construction of a new toilet, changing room and multi-use facility. Internal officer estimates suggested the total value of works covered by the agreed plan was in the vicinity of $4.5m.

4. Council identified the need to replace the aged and “bunker style” changing rooms and allocated, in the 2009 Long Term Plan, a budget of $1.4m to be spent in the 2016/17 financial year.

5. The construction of the new toilets and changing facility was completed in 2018. This also included improvements to the internal road. The multi-purpose space was not constructed and no funding is currently in the Long Term Plan for any further improvements at Te Whiti Park.

6. The Association has made successive submissions to the Annual Plan process since 2013 to support the original concept plan and more recently, submitted to Council seeking budget approval to commit funding to the construction of the multi-purpose space attached to the changing facility.

7. The Association is again seeking a funding commitment from Council with the Association proposing a shared funding approach.

8. As part of Council’s asset sales programme, two properties located on Te Whiti Park formerly used by park custodians were sold. Council agreed with the Runanga and the Association to reinvest the proceeds of sale from the properties back into the park.

Discussion

9. The Association has a long history of working collaboratively with Council and other organisations in the delivery of community programmes and activities benefiting the community. In many regards the Association has been operating as a successful community and recreational hub for some years, aligning with the Council’s vision for integrated facilities and services.

10. Established in 1937, the Association currently has 12 affiliate clubs or organisations covering for example, rugby league, cricket, touch football, kapa haka, netball, and softball. The current membership is 1200. The Association operates under the umbrella of Te Runanganui o Taranaki.

11. The proposal by the Association is to implement the original design proposal to construct a multi-functional room attached to the changing rooms. The room will enable the Association to consolidate its sport and community operations in a single facility, and allow Council to improve the landscape and amenity aspect of the park by removing the buildings that are currently used by the Association.

12. The multi-purpose room was included in the original design for the recently completed changing rooms. However, a survey of the costs for the total facility at the end of the design phase showed that the $1.4m budget was insufficient to complete the entire building. Notwithstanding this and in anticipation of possible future budget allocations, officers applied for and obtained building and resource consents for the entire building on the basis that construction could be undertaken over two stages, and subject to funding availability. The approved consents expire in 2020.

13. The construction of the multi-functional space, essentially stage two, is estimated to cost $840,000 + GST and includes the demolition of two concrete buildings on the park currently owned by the Runanga.

14. While funding is being sought from Council, the Association is proposing to contribute up to a third of the total cost through direct funds and in-kind contributions, e.g. undertaking the fit-out of the space. The balance of the costs will be funded by Council and external Trust funding.

15. Council has in the past adopted a practice of agreeing to contribute to a project of this nature on the basis that the total cost is shared, usually on a third share basis. This is particularly the case where the asset contributes to community outcomes. For example, Council:

a. Contributed $200,000 in 2016 towards the renewal of the artificial hockey turf at Fraser Park (total cost was estimated at $600,000);

b. Budgeted $250,000 towards improvements at the Mitchell Park tennis facility;

c. Contributed $100,000 towards the relocation of the Waimarie Croquet Club

16. It is proposed that the room is leased to the Association with an annual rent being payable to Council. All costs related to power, rates and maintenance will be the responsibility of the Association.

17. The Association recognises the importance of the multi-functional space being a community asset. While the space will be used and managed primarily by the Association and Runanga for its community and sport initiatives, this will be during the week-day, with times outside of this being made available for bookings and use by other community organisations.

Options

18. There are three main options available:

a. Support the request entirely – this involves fully funding the project estimated at $840,000 + GST. Funding could be spread across two financial years to assist with funding management.

b. Support the request in part – this involves Council committing a minimum of $300,000 + GST to the project, with the Association and external Trust funding making up the balance. An extension of this support could be that Council underwrite any shortfall in the budget. Specific conditions could be placed on the support that may include limiting drawdown of the budget until full funding has been secured.

c. Decline the request – Council may consider this has merit but that funding priorities for a project of this nature when compared with other demands are limited at this time.

Consultation

19. A copy of this report has been provided to the Association.

Legal Considerations

20. Resource and building consent is already in place for the multi-purpose room. This consent expires in 2020 although an extension could be sought.

Financial Considerations

21. The total cost of the proposal under request is estimated at $840,000 + GST. The Association is seeking support from Council to enter into a shared funding contribution. A shared approach will see Council contribute a minimum of $300,000 + GST.

22. There will be costs related to the option of underwriting any shortfall of the project. The precise quantum of this is unknown at this time, although Council could place limits on this.

23. A lease of the multi-function room to the Association will attract an annual rent. Based on the Reserves Rental Formula this will be in the range of $1,000 + GST.

Policy Considerations

24. Te Whiti Park is co-managed with the Runanga and the Association under a formal agreement. This agreement has been in place for many years and recognises the cultural and historical significance the Park is to these parties.

25. The proposal is consistent with the Sportsgrounds Reserves Management Plan as it provides that where possible, as much of the park is retained as open space, which can be achieved through the reduction in the number of buildings on the park and consolidation of operations into a single facility.

26. The Association’s current operating model is consistent with Council’s integrated facilities (Sportsville) approach.

Other Considerations

27. In making this recommendation, officers have given careful consideration to the purpose of local government in section 10 of the Local Government Act 2002. The recommendations fall within the purpose of local government in that it is a statutory process delegated under statute to local government and required to enable a community use of a Council reserve.

Appendices

No.	Title	Page
1	Te Whiti Park Site Plan

Author: Aaron Marsh

Team Leader Parks

Approved By: Matt Reid

General Manager City and Community Services

252 11 June 2019

Community Plan Committee

20 May 2019

File: (19/649)

Report no: CPC2019/3/109

Recommendation from Council - Homelessness in the City

Purpose of Report

1. For the Community Plan Committee to consider the recommendations from the Council meeting held on 26 March 2019 in relation to homelessness in the city.

2. Council, at its meeting held on 26 March 2019, unanimously resolved the following:

Resolved: (Mayor Wallace/Cr Lulich) Minute No. C 19123

“That Council:

(i) agrees the proposed strategic approach to homelessness in the city. This includes changing the wording of priority five from ‘Improving data on homelessness in Lower Hutt’ to ‘Improving the understanding of homelessness in Lower Hutt;

(ii) agrees the three-year funding proposal in option one to contribute to implementing the Lower Hutt Homelessness Strategy, of Year One: $560,000; Year two: $520,000; and Year three: $520,000;

(iii) agrees to review the action plan after the initial three-year period with further funding considered as part of the Long Term Plan;

(iii) agrees to work with partners to implement the initial action plan for the strategy;

(v) agrees that Council participates in the Governance of Housing First in the Hutt Valley and Wellington along with partners including Iwi, non-governmental organisations, local government and central government;

(iv) forwards the matter to the Community Plan Committee on 5 June 2019 for its consideration; and

(vii) agrees to request with some urgency the establishment of a Housing First initiative in the Hutt Valley.”

Background

3. Following the research into the nature and extent of homelessness in Lower Hutt (May 2018), in November 2018 Council unanimously resolved to leading a strategic approach to homelessness in the city. At the meeting of 26 March 2019 Council unanimously agreed to the recommendation for funding Council’s contribution improving the effectiveness of the response to homelessness in the city.

4. The recommendation agreed to aligns strongly with the findings from the research in terms of the service gaps, lack of access to settled accommodation – and therefore high use of temporary and unsuitable accommodation – and the lack of capacity to respond to the needs of people who are at risk of homelessness or who are experiencing homelessness. The option includes the three elements of contributing to increased access to housing, preventing homelessness, and advice and advocacy.

Housing First

5. The funding agreed to by Council in March 2019 does not include any funding for Housing First.

6. With the expectation Housing First will be implemented in Lower Hutt to address the complex issue of rough sleepers, Council’s Homelessness Strategy action plan has intentionally focused on the whole homelessness continuum, especially families with children living in unsafe and insecure situations.

7. Housing First is a government funded programme targeting the sharp end of homelessness – people who are sleeping rough and who have been sleeping rough for around 12 months. These are people who are often the most socially excluded and who often have highly complex problems. The vast majority of households experiencing homelessness are not in this category.

8. In the Wellbeing Budget on 30 May, the Government announced additional funding for Housing First nationally, mostly to expand the programme to new areas. In Wellington, including Lower Hutt and the valley, the two service agreements with Housing and Urban Development (HUD) to deliver Housing First have been finalised during late May. The current funding is for 200 Housing First places for Wellington and the valley over two years. Any new places will be decided during the latter part of 2019. Both programmes will begin delivery in Wellington city from June and there is, from our conversations with providers and HUD, no date at this time for implementation in Lower Hutt. We believe that practical implementation here may begin later in 2019. Council has agreed to support providers and government by being part of the Housing First governance group.

Rationale for Council action

9. Both government data and reports from agencies indicate that Lower Hutt has a growing homelessness and housing hardship issue during, with a consensus that needs are likely to remain high at least in the next three to five year period. Data available from local agencies, transitional housing places, and the level of Emergency Housing Special Needs Grants (EHSNGs) indicate the local needs but do not fully quantify the issues. Council’s research identified that people in the city were remaining homeless for extended periods.

Indicators of need

Between 2006 and 2013 the number of homeless households in Lower Hutt increased by 41%, from 646 people to 913 people. This means that the city at that time had a homelessness prevalence of 9 per 1000 population and has had the second highest prevalence per 1000 population in the region during the period from the 2001 census.^{^[5]} Both the data available and the consensus amongst organisations is that the situation has worsened during the last five years.

Transitional and emergency accommodation

The Ministry of Housing and Urban Development (HUD) has increased the number of transitional housing places in the city, from 44 in December 2017 to 66 in early 2019. The data available shows only the use of transitional housing, but without the details of the households using it, while both partners and the Ministry report there is considerable unmet need for this accommodation.

Some of the additional needs are indicated in the number of Emergency Housing Grants paid to households. During the March 2019 quarter, 49% (803) of EHSNG in the region were paid to households in Lower Hutt. 63% of the cost of EHSNGs – $1,320,659 of $2,098,006 – in the region during this quarter was spent on grants to households in the city.

MSD officers at local office level report high needs for temporary accommodation in the city and regularly use hotel accommodation for those who are eligible for assistance – these hotels can be in Lower Hutt, neighbouring areas including Porirua, and further north in some instances. People are in emergency accommodation for extended periods.

Emergency Housing Special Needs Grants in Lower Hutt 2017 – 2019

Period	Emergency Housing Special Needs Grants	Number of distinct clients receiving grants
March quarter 2017	234	69
June quarter 2017	315	83
September quarter 2017	348	94
December quarter 2017	225	83
March quarter 2018	411	116
June quarter 2018	440	117
September quarter 2018	600	137
December quarter 2018	719	151
March 2019	803	Not currently available

Housing Register

From March 2017 to March 2019 the register in Lower Hutt increased by 143%.

Lower Hutt Housing Register: June 2014 – March 2019

The number of households in Band A ie, who are at most risk and have severe and persistent housing needs that should be addressed immediately, continues to increase. In the March quarter of 2019, 80.8% were in Band A. Many of these will be defined as homeless. Currently in Lower Hutt a household needs to be at category 19 or 20 of Band A to have a chance of being housed.

The households on the register at the end of the March 2019 quarter included 442 adults and 363 children.

Private rented sector

Rents have been increasing during the period since 2015. During 2017-2018, rents increased by 10% across the city with increases of 11.5% and 11% in the central and northern wards respectively.

Bond data shows that there is very little turnover of tenancies. The rental market is the main source of homes for many households and the increasing competition means that more households find themselves excluded from the sector. The level of competition means that those with the greatest needs are at particular disadvantage.

Rough sleeping

We are unable to provide the number of people sleeping rough or in cars/vehicles, or improvised shelters in the city but, as part of work in the future, we will consider conducting a point-in-time rough sleeping count as well as improving agencies’ monitoring of this aspect of homelessness. There are individuals and families sleeping rough or in cars/vehicles, and improvised shelters in locations across the city, including Wainuiomata, the east and west ends of Petone foreshore, Waterloo, as well as instances in the Lower Hutt CBD, north-east areas of the city, and Western Hills.

It is also very difficult to quantify the number of households living temporarily with whanau or friends and moving between such accommodation as well as other insecure and unsafe situations

Increasing homelessness

The indications are that homelessness and housing hardship is likely to continue and increase in Lower Hutt in the short-term. There is a limited supply of affordable homes and making a considerable difference on this aspect is expected to take around three to five years. Pressure on rented housing is therefore likely to continue. As well as increasing housing supply, actions are required to improve the response to immediate needs during this period.

For further data and case studies see Homelessness in Lower Hutt (May, 2018). Further information on Council’s work can be found in the reports to Policy and Regulatory in November 2018 and March 2019.

10. In line with the leadership Hutt City Council demonstrated in developing the strategy, Council needs to commit resources to its practical delivery. Nothing will change without this commitment. By instigating this work Council has publicly stated that it sees itself contributing to addressing homelessness in ways beyond business as usual.

11. Council’s research and engagement throughout 2018 showed that organisations and individuals in the city believe that Council has a role in contributing to tackling homelessness. Consultation at the end of the year demonstrated strong support for Council’s direction.

12. As leaders in their communities, local councils are demonstrating that responding to homelessness is not just a central government responsibility and are actively tackling homelessness alongside central government and other partners in health, and the non-governmental sector. Lower Hutt is the seventh largest city in New Zealand by population. In the top seven, five of the councils are involved in funding homelessness interventions. Similarly to Hutt City Council, councils in these areas have identified homelessness as an issue for the wellbeing of all residents.

13. Hutt City Council does not currently provide financial support for agencies assisting residents of the city experiencing homelessness and housing hardship. The role and funding agreed by Council is similar to what other councils are doing, in terms of increasing capacity of the local non-governmental sector, providing ongoing leadership, and working in partnership. The funding would assist Council to achieve the priorities of the homelessness strategy and also help achieve overall Council aims and outcomes including “empowering brighter futures for those most in need in the city” and achieving Council’s aims that Lower Hutt is a safe and healthy city in which all residents can prosper in strong and inclusive communities.

14. Contributing to effectively responding to homelessness is in line with the wellbeing agenda and working alongside government for better social, educational and economic outcomes. Resolving homelessness and increasing housing supply are high priorities for government and augmenting government’s work as well as influencing its direction, will be key in building better local communities. Council has already signalled to government that it is keen to work in partnership and determined to work together and across portfolio boundaries, to address homelessness and housing supply. (A Bold Plan to Reduce Poverty and Material Hardship in Hutt City, Hutt City Council 2018)

Council funding components

15. By instigating the development of the strategy and action plan, Council has indicated that it sees itself contributing to addressing homelessness in ways beyond business as usual and in response to the needs indicated in the research.

16. Given Council’s strategic direction, and the engagement conducted with a wider range of people in the community during 2018, the funding recommendation to Council in March focusses on strengthening the approach to preventing homelessness. The main elements in the options are to:

· increase access to housing;

· support households at risk of homelessness to maintain accommodation; and

· provide access to housing advice and advocacy.

Research and evaluation of prevention programmes indicate that these elements work well as part of a proactive, as opposed to a reactive, approach to homelessness. (Pawson et. al., Evaluating Homelessness Prevention)

Access to private rented accommodation with support = $110,000 per year (three years).

17. This action increases the staff capacity of a local Non-Government Organisation (NGO) to let properties to households that are homeless or at risk of homelessness, and that have difficulty competing for tenancies. The action is in-line with the aim of focussing on settled homes rather than temporary accommodation. The NGO has a good record of building relationships with investors and is growing its access to housing. To be able to effectively manage more properties and support households, it needs additional capacity.

18. Interventions that seek to increase access to settled accommodation for homeless households operate in New Zealand and internationally. Key elements of the models typically include building a relationship with landlords and investors to access housing, provide owners with a free tenancy management service, guaranteed rent, support for the tenant and household, and guarantees against damage.

19. In the current housing environment, working to improve access to private rental homes can make an important contribution to housing supply for households that have largely been excluded from the private rental market. This market is very competitive and families on lower incomes or who have higher social needs are unable to compete and therefore unable to secure this accommodation.

20. This action is essentially a partnership between a local organisation – as well as other support providers – with expertise of responding to homelessness, private investors with a social motivation, and Council, which will enable households to access settled accommodation in the city.

21. The action aims to work with a minimum of 50 households per year to both gain access to settled accommodation and to sustain the accommodation.

Prevention of homelessness – working with a minimum of 100 at-risk households per year = $370,000 per year (three years).

22. A clearly identified issue in the local research is that the high demand for services means that support agencies do not have the capacity to focus on preventing homelessness and instead take a reactive approach. The aim of this action is to avoid the negative impacts of homelessness on individuals, their whānau, and the community. Preventing homelessness avoids the social costs of displacing families as well as reducing economic costs.

23. This funding provides capacity for an NGO to work with individuals and whānau who are at risk of becoming homeless. The intervention aims to prevent homelessness for a minimum of 100 households per year. The focus is on targeting households – mainly families with children – that are at risk of homelessness and providing support to ensure that they do not lose their homes. The service will support whānau and link into services and support in the community to help resolve their challenges. The cost includes a ‘flexi fund’ that can be used to help resolve threats to the tenancy, whether it is paying off a small debt, help with maintenance, or purchasing items that cannot be accessed through other services.

24. This action fits with MBIE’s Tenancy Services Better Housing Outcomes programme and there is a possibility of working in partnership with the Ministry in this respect. The funding works out at a maximum of $3700 per household. During the September quarter of 2018 the average cost just to place one homeless household from Lower Hutt in emergency hotel accommodation was $5,600. This does not include any of the costs, both economic and social, to the family or any other costs. Dealing with homelessness is more expensive than preventing it in the first place – the cost of someone being homeless in New Zealand for a year has been calculated at $65,000.

Provide housing advice and advocacy = $80,000 in the first year, $40,000 in year two and three. The funding decrease is dependent on securing partnership funding. If partnership funding cannot be secured, Council funding for year two will remain at $80,000 to allow further work to seek such funding.

25. Housing advice and advocacy is a key component of interventions to prevent homelessness. It provides households with the information, advice and advocacy they need to help address their housing or homelessness issues or prevent households becoming homeless. Elements of advice services include:

· housing advice to empower clients to take action themselves or through referrals to other organisations;

· prevention of homelessness through direct intervention; and

· assistance to clients to secure accommodation.

26. The research found a lack of housing advice and advocacy. Non-housing organisations spend considerable time dealing with housing issues prior to being able to assist people with their core work eg, support to access training, education, employment, or improving health and well-being.

27. This action seeks to increase the capacity of an existing organisation to deliver housing advice and advocacy in Lower Hutt. We are exploring the delivery of advice in community locations in the city. The service will provide advocacy to help clients access the support and accommodation to which they are eligible. Officers are discussing details of how to deliver the service with organisations.

28. In addition to the funding components, Council will:

· support government and partners in delivering Housing First through the Governance Group, and continue to explore means of supporting the work to end rough sleeping;

· strengthen its role of influencing central government to improve housing supply in the city as well as services for households who are homeless or at risk of homelessness; and

· linked to the funding actions and generally, work to improve data on homelessness and housing hardship in the city. We have also spoken to HUD about its work in this understanding homelessness and better targeting services.

Appendices

There are no appendices for this report.

Author: John Pritchard

Principal Research and Policy Advisor

Reviewed By: Wendy Moore

Divisional Manager, Strategy and Planning

Approved By: Helen Oram

Acting General Manager, City Transformation

260 11 June 2019

Community Plan Committee

14 May 2019

File: (19/605)

Report no: CPC2019/3/103

Council Contractors and the Living Wage

Purpose of Report

1. To report back to Council on the impact should Council require contractors to pay their employees working on Council contracts, at least the Living Wage.

Recommendations

That the Committee:

(i) receives and notes the contents of this report; and

(ii) makes a recommendation to Council to EITHER:

(a) resolve that contracting suppliers to Council be required to pay their employees at least the Living Wage when working on Council contracts; or

(b) resolve that contracting suppliers to Council for specific services to pay their employees at least the Living Wage when working on Council contracts; or

(c) resolve that contracting Suppliers to Council not be required to pay their employees at least the Living Wage when working on Council contracts; and

(iii) should it decide on paragraph (ii)(a) or paragraph (ii)(b) above, makes a further recommendation to Council to adopt a phased implementation based on expiry of existing contracts, with the exception of contracts that were tendered and awarded during the analysis period whose alternative tender pricing based on paying the Living Wage, should take effect from 1 July 2019; and

(iv) notes officers will amend Council’s Procurement Policy to include a non-price attribute within its tender evaluation criteria for contractors, to award evaluation points based on the extent to which tenderers do (or will) pay its employees at least the Living Wage rate of pay when working on Council contracts.

Background

2. At the Community Plan Committee on 6 June 2018, the Committee resolved to pay directly-employed Council staff from 1 July 2018 a minimum wage of $20.55 per hour, the then prevailing Living Wage. Council had previously resolved to support the Living Wage in principle but did not resolve to become an accredited Living Wage employer.

3. At the same meeting, the Committee also “asked the Chief Executive to continue to work with Living Wage Hutt Valley and the Hutt Valley Chamber of Commerce in regard to contractors to Council and report back by the end of 2018 on progress.”

Discussion

4. This report does not discuss the advantages and disadvantages of paying or not paying the Living Wage.

5. Officers met with representatives from Living Wage Movement Hutt Valley and the Hutt Valley Chamber of Commerce and agreed to include the following wording (or variants of it), in any upcoming contract tender documents and in a questionnaire to be sent to known contracting companies to Council:

HCC has recently introduced a policy for directly-employed workers to be paid the Living Wage and is considering as a requirement in future contract renewals, for workers employed by contractors to also be paid the Living Wage.

How many FTE employees do you currently employ on less than the Living Wage of $20.55 per hour on HCC contract work?

Please include in your tender response, alternative pricing if HCC did require workers employed on HCC contracts, be paid the Living Wage.

6. Officers compiled a list of 27 known contracts for “regular on going service delivery” with 21 suppliers with a combined annual contract value of $16.0M. Nine of the 27 contracts are individually less than $50,000 per annum and collectively account for only $146,000 of the $16.0M total.

7. The services covered by the 18 contracts with annual spend greater than $50,000 include: general maintenance; cleaning of offices, community facilities and public toilets; parks and reserves and sports ground maintenance; rubbish and recycling collections; sanitation services; road and footpath maintenance; graffiti removal; street cleaning; weed spraying; and security services.

8. One-off tenders, contracts or orders for individual maintenance jobs have not been considered in the analysis nor have ad-hoc purchases of tradesperson type services.

9. All of Councils “regular on going service delivery” contracts have clauses to (at a minimum) annually adjust contract values by the Labour Cost Index and the Producers Price Index.

10. Officers contacted each of the 21 identified suppliers and asked them questions to ascertain as best possible, what the cost imposition to Council would be should Council require them to pay the Living Wage to their employees when working on Council contracts.

11. A number of suppliers were unwilling or unable to provide all of the details requested. In these situations, officers have made some assumptions based on information provided by other suppliers who are part of the analysis and thought to have similar labour/cost profiles. The financial analysis therefore includes a degree of estimation error.

12. During the analysis period, a couple of expiring Council contracts were retendered. On each occasion tendering suppliers were asked to submit pricing as per usual, and if they were not paying their employees at least the Living Wage, to submit alternative pricing should Council subsequently require them to do so. Tenderers were also advised that should Council decide to require the successful tenderer to pay their employees working on Council contracts at least the Living Wage and they weren’t currently doing so, that such a requirement could be placed on the successful tenderer before the expiry of the new contract term.

13. To illustrate estimation error, for one of the expiring contracts retendered subsequent to the analysis period, based on information provided by the suppliers during the analysis period, officers estimated the difference between the suppliers previous contract price and the supplier paying the Living Wage to their employees when working on the Council contract, would have resulted in a 8.8% increase in contract price.

The difference between the suppliers retendered price based on not paying the Living Wage and paying the Living Wage is 18.8% for the first year of the contract.

14. All suppliers emphasised the importance of confidentiality. Details that may identify the contracted service or supplier have therefore not been provided in this report.

15. On 1 April 2019, Living Wage Movement Aotearoa NZ advised that the 2019 Living Wage would increase from $20.55 per hour to $21.15 per hour – an increase of 2.9%. The Government also recently increased the Minimum Wage from $16.50 per hour to $17.70 per hour – an increase of 7.3%. The Minimum Wage increase is in-line with Governments previously stated commitment to progressively increase the Minimum Wage to $20.00 per hour by April 2021.

16. The gap between the Minimum Wage and the Living Wage is narrowing. For the next two years, increases to the Living Wage are ‘pegged’ to movements in the average wage, which Treasury estimates will run at 3.1% and 3.3% for the 2020 and 2021 years. Over the same years, the Minimum Wage will further increase by $1.10 per hour (6.2%) in 2020 and a further $1.20 per hour (6.4%) on 2021. The gap between the Minimum Wage and the Living Wage will reduce from 24.5% (prior to 1 April 2019) to 12.6% in 2021.

17. The estimated cost impact analysis has been calculated using the hourly rates in the above table applicable for each of the 2019/20, 2020/21 and 2021/22 financial years. The hourly rates from 1 April 2021 have also been applied for the financial years beyond 2021/22.

Results of Analysis

18. Thirteen suppliers responsible for 14 of the 27 contracts advised they were already paying their employees at least the Living Wage. Employees for the eight other suppliers are being paid at least the Living Wage to varying degrees.

19. $8.3M of the $16.0M combined annual contract value is estimated to be labour costs. $5.1M of the $8.3M estimated labour costs is estimated to be paid at or above the Living Wage.

20. Of the $3.2M ($8.3M less $5.1M) estimated labour cost thought to be paid at less than the Living Wage, officers do not know the hourly rates being paid by suppliers but they will be between the Minimum Wage (now $17.70 per hour) and the Living Wage (now $21.15 per hour).

21. If all were being paid at $17.70 per hour, then the cost impact to Council should it require the contracted suppliers to pay their employees at least the Living Wage would be circa $676,000 in 2019/20 and reducing to circa $440,000 in 2021/22 and beyond. [This assumes all contractors would be required to start paying the Living Wage at the same time, rather than from the date of expiry of existing contracts.]

22. However, it is unlikely that all employees not being paid the Living Wage would all be being paid the Minimum Wage. Some employees could be being paid just under the Living Wage, which means the likely cost impact to Council should it require the contracted suppliers to pay their employees at least the Living Wage would be less than the estimates in the previous paragraph.

23. What is known is for the recently expired and retendered contracts, the collective difference in the successful tenderers pricing between them not paying the Living Wage and paying the Living Wage would be $90,000 in 2019/20 and reducing to $60,000 in 2021/22 and beyond. The two contracts retendered are relatively small with a 2019/20 combined contract value of $544,000. The $90,000 difference for 2019/20 is 16.5%. The wage component of the two contracts is circa 65%.

24. Using a midpoint of $19.43 per hour, the cost impact to Council is estimated to be $357,000 in 2019/20 and reducing to circa $240,000 in 2021/22 and beyond. [This assumes all contractors would be required to start paying the Living Wage at the same time, rather than from the date of expiry of existing contracts.]

Comments from Suppliers

25. Suppliers were also asked:

Do you foresee any other issues or considerations that might arise from HCC requiring workers employed by contractors to also be paid the Living Wage?

26. Several suppliers thought there would be a range of issues. Comments included:

a. Unions indicating the importance of maintaining pay parity which would increase wages across the board and increase contractors overall costs.

b. Issues with the wages of staff who work across several contracts (not just HCC). The expectation that they are on a single pay rate would have an impact across the board.

c. Issues with the wages of staff who don’t work on the HCC contract but are performing the same task on other contracts.

d. How subcontractors would be treated.

e. Apprentice pay scales that reflect their learning/training. Increasing apprentices pay is a disincentive for the scheme.

f. Do we take into account commissions and performance related bonuses, allowances and extra hours of offered work.

With respect to apprentices, the Living Wage Movement acknowledges the learning/training these workers receive, and as such apprentices are excluded from their requirement to be paid the Living Wage.

27. Secondary impacts have not been considered in the financial analysis.

Position of Other Councils

28. Over 100 employers including Westpac, Vector and AMP, have become accredited Living Wage employers. A number of councils, including Hutt City Council, have elected to pay their directly employed staff at least the Living Wage.

29. To date, Wellington City Council (WCC) is the only Local Authority that has elected to become an accredited Living Wage employer, meaning, in addition to paying its directly employed staff the Living Wage, WCC will also require its contractors to pay its employees when working on WCC contracts, at least the Living Wage. WCC elected to immediately implement this requirement for its cleaning, security and landfill contracts. Other WCC contractors will have this same requirement upon expiry of their current contract(s).

Procurement Policy Change

30. Irrespective of Councils decision on this topic, Officers will amend Council’s Procurement Policy and Procurement Guideline to include within the tender evaluation criteria, a non-price attribute to award evaluation points based on the extent to which tenderers do (or will) pay its employees when working on Council contracts, at least the Living Wage rate of pay. The percentage weighting this non-price attribute will have and the associated evaluation criteria have not yet been determined.

Financial Considerations

31. Requiring contractors to pay the Living Wage to their employees working on Council contracts will result in an increase in Councils operating costs.

32. At a minimum, based on two recently retendered contracts, this will be $90,000 per annum in 2019/20 (reducing to $60,000 in 2021/22 and beyond).

33. The increase is likely to be between $240,000 and $440,000 per annum when fully implemented, however, it is likely to be between $357,000 and $676,000 in 2019/20 and then between $298,000 and $556,000 in 2020/21, if implemented for all existing contracts effective 1 July 2019.

34. Operating costs should be funded from rates and other revenue streams and not by debt. Officers believe it is unlikely that additional operating costs of the above magnitude can be accommodated within the limits of Councils Financial Strategy.

35. An additional 0.3% to 0.5% rates increase would be required for one year over and above Councils current rates strategy, if the requirement for contractors to pay their employees working on Council contracts the Living Wage was implemented at one time across all existing contracts. The year on year additional funding requirements under this scenario would be:

Year	Midpoint	Maximum
2019/20	$357,000	$676,000
2020/21	$298,000	$556,000
2021/22	$240,000	$440,000
2022/23 and beyond	$240,000	$440,000

36. Lesser rates increases would be required over several years if the requirement was implemented on expiry (and retendering) of existing contracts. The year on year additional funding requirements under this scenario would be:

Year	Midpoint	Maximum
2019/20	$131,000	$221,000
2020/21	$140,000	$247,000
2021/22	$156,000	$288,000
2022/23	$156,000	$288,000
2023/24	$215,000	$415,000
2024/25 and beyond	$240,000	$440,000

37. Council could also decide to reprioritise existing operating expenditure budgets as an alternative to additional rates increases.

Legal Considerations

38. One of the initial hurdles to requiring Council contractors to pay the Living Wage was an argument that it was outside the purpose of local government. We were able to pay our staff the Living Wage as there were different considerations, including an obligation on Council to be a good employer.

39. The purpose of Local Government has now changed back to the broader “four well-beings” – to promote the social, economic, environmental and cultural well-being of communities in the present and for the future. These are considered broad enough that there is little risk of Council being legally challenged for acting outside its purpose.

40. The decision-making here should now be focused on the ordinary decision-making requirements, which apply to all decisions Council makes (sections 76-82 of the Local Government Act 2002). Amongst other things, these require Council to seek to identify all reasonably practicable options for the achievement of the objective of a decision and to assess the options in terms of their advantages and disadvantages. These have been set out and discussed in the paper above.

41. When considering commercial decisions, Council also needs to be mindful of the principles found at section 14 of the Act, which require Council to undertake transactions in accordance with sound business practice and to ensure prudent stewardship and the effective and efficient use of its resources in the interest of Lower Hutt.

Options

42. Councils options include:

(a) the requirement for contracting suppliers to Council to pay their employees at least the Living Wage when working on Council contracts; or

(b) the requirement for contracting suppliers to Council for specific services to pay their employees at least the Living Wage when working on Council contracts; or

(c) Contracting Suppliers to Council are not required to pay their employees at least the Living Wage when working on Council contracts.

43. Should Council decide on option (a) or (b), officers recommend a phased implementation based on expiry of existing contracts, with the exception of the contracts that were tendered and awarded during the analysis period whose alternative tender pricing based on paying the Living Wage should take effect from 1 July 2019.

Consultation

44. The public has not been consulted on their views on whether contractors to Council should be required to pay their employees at least the Living Wage when working on Council contracts.

45. In April and May 2018, Council did conduct two surveys with residents regarding Councils approach to paying its lowest paid staff. Both the Peter Glen Research telephone survey of 400 residents and the 211 random respondents to the Public Voice survey, showed 75% support to either increase Council’s minimum wage to $20.00 per hour or to fully implement a Living Wage of $20.55 per hour, both from 1 July 2018.

46. It is unlikely that Council could accommodate expenditure increases outlined in the Financial Considerations section of this report without an additional rates increase or a reprioritisation of existing expenditure budgets. An additional rates increase above the increases already included in the proposed 2019/20 Annual Plan and budgets, would breach the rates increase limit within Councils Financial Strategy. Council has previously consulted the public whenever it has sought to breach or change its Financial Strategy limits.

Appendices

There are no appendices for this report.

Author: Brent Kibblewhite

General Manager Corporate Services

Approved By: Matt Reid

Acting Chief Executive/General Manager City and Community Services

270 11 June 2019

Community Plan Committee

10 May 2019

File: (19/589)

Report no: CPC2019/3/102

Further Information Requested by Community Plan Committee 8 May 2019

Purpose of Report

1. The purpose of this report is to provide further information that was requested by the Committee at its 8 May 2019 meeting.

Recommendations

That the Committee receives and notes the information presented in the report.

Background

2. The Community Plan Committee at its meeting held on 8 May 2019 heard from groups and individuals who were presenting as part of the “Have Your Say” engagement process for the Annual Plan 2019-2020. The Committee requested further information on many of the matters raised to inform its decision-making on 11 June. This report has been compiled from information provided by Council officers and is outlined below in Activity order.

3. Should the Committee require more detailed reports on any of the topics mentioned, these can be requested for future meeting cycles to go to the appropriate Committees.

Integrated Community Services

Grant Funding

4. Officers have met with the Citizens Advice Bureau (CAB) to discuss their concerns over the new funding arrangement including opportunities for them to share library space in order to save rental charges. They have asked for two meeting rooms, a room for their coordinator and a reception area. Officers have identified a space in the War Memorial Library that could be reconfigured to include the three rooms, and would also provide an independent access. A floorplan with dimensions has been provided for CAB consideration.

5. The Hutt City Emergency Response Team will receive a $15,200 grant each year until 2021 to supply specific emergency services to Council. In addition they have received funding this year for personal protective equipment, as they are effectively contracted by Council to do emergency search and rescue within the Council’s area and Council would be potentially liable if their equipment was not up to standard. In terms of the contestable funding that is available for community organisations to apply to for operational costs, this organisation is ineligible to apply because they already receive funding for operational costs from Council.

Petone Library

6. During the pilot of the online tool, the opportunity was taken to ask for views and ideas on the potential redevelopment of the Petone Library. The online tool asked a series of questions in separate discussion forums, and supported a range of face-to-face activities during March and April 2019. As Council explores options for the Petone Library and Heritage Centre on Britannia Street, community input will help to shape decisions. Funding of $1.5 million is budgeted in the Annual Plan in 2021/22 to refurbish the existing building. Questions posed in the online tool asked for thoughts and ideas to meet the current and future needs of the Petone community. Input from the community will be used to inform Council’s decision-making.

Disabled Access to War Memorial Library

7. Officers will look into pedestrian arrangements that will enhance the existing set up and provide for a safer route into the War Memorial Library.

Funding for Sports Clubs: Sportsvilles vs Individual Clubs

8. Allowance for all funding is at the discretion of Council. Council considers a number of factors in these decisions, the most relevant in this context being the Long Term Integrated Community Facilities Plan (LTICFP) and its focus upon resource sharing and rationalisation. Council will consider requests for funding which demonstrate alignment to this document. Our LTICFP is strongly aligned to all relevant documents of the sector, particularly Sport Wellington and Sport NZ which prioritise integration of resource, governance and collaboration.

9. These respective organisations work together on the notion that the future of sport is shared. These approaches set the framework for how we allocate work or funding in terms of community sports organisations. With 71 sports operating in our city and around 350 organisations, Sport simply does not have the resources to address the needs of the diverse range of community sports organisations independently. Working in an integrated fashion displays a participant-focused approach which means the goal is to change the system to better respond to the needs of the participants.

10. Council’s Leisure and Wellbeing Strategy provides a vital part of the framework to achieve Council’s vision of a city that is a great place to live, work and play. This framework is structured around integrated community facilities, improving outcomes in the North East, children and young people, and community safety.

Need for a Regional Sports Plan

11. Recently Council’s approach has been supported and underpinned by the work of Sport Wellington in completing “Living Well”- a regional strategy for sport and recreation. Coordinated by Sport Wellington, ‘Living Well’ is a regional strategy that has been developed with Sport NZ and key sport and active recreation providers to facilitate collaborative thinking and strategic decision-making for the planning and delivery of sport and active recreation in the wider Wellington region.

12. One of the key recommendations from the Living Well Strategy was the need for a regional facilities plan. Council has participated in the development of a strategic facilities plan for sport and recreational facilities in the wider Wellington region. The plan is intended to provide a road map and guideline for key decision-making in the region for sport and recreational facilities, including what should or should not be supported with funding. The work is being led through Sport Wellington and supported by Sport NZ, local councils and Regional Sports Trusts.

13. A draft plan will ideally be presented to the regional Mayors’ group later this year before being presented to councils for endorsement.

14. Officers are very supportive of the need for a regional plan to be adopted and supported by the entire region. Council is well placed with regard to its position within a regional plan, especially given its already adopted principles and developments as per the Long Term Integrated Community Facilities Plan.

Wainuiomata Community Hub

15. Officers have been considering the opportunities for Wainuiomata given planned developments to the CBD by Progressive Enterprises. While this work continues, the Naenae Pool has taken greater and more immediate priority. Council has a budget provision in 2027-29 of $7.8 million for a Community Hub in Wainuiomata. At this stage no changes are recommended to the amount and timing of this provision. As with a number of budget provisions for new community assets, a decision on Naenae Pool is recommended to be Council’s first priority.

Parks and Reserves

Delaney Park

16. Council has engaged a plumber to undertake repairs to the electric boilers. This work will be completed by the end of May at the latest. Officers will visit the site and look at the condition of the asphalt driveway. Any repairs will be prioritised alongside the balance of maintenance work scheduled for hard surfaces at other city parks. Officers agree with the rubbish bin relocation option. This has been passed on to Council’s maintenance contractor and will be done soon.

17. Regarding the request for installation of a security camera, Council has installed and maintains 48 cameras with a further three in the process of being installed. The next budget for additional capital is 2025 and any growth will require a review and crime analysis. Council is guided by the Police to determine whether a camera should be installed, ie, using Police statistics, evidence based data and criminal analysis results. To date Police have not recommended or identified Delaney Park as an area which requires the installation of a security camera.

Dowse Drive Reserve

18. Officers have met with representatives from Maungaraki School and the Ministry of Education regarding running a joint project to upgrade the drainage at Dowse Drive Reserve. Officers have advised that Council has no budget for this project, but that officers would be willing to enter discussions and work collaboratively with the Ministry on the project. Feedback from the Ministry is that they are not considering the project at this time. The project can proceed but this would require a collaborative approach from all parties.

Eastbourne Heritage Trail Courtyard

19. During 2013 Eastbourne received its allocation of funding from Council’s Suburban Shopping Centre Improvement Fund (SSCIF). From that time the Eastbourne Community Board, officers and the community have worked together to roll out street landscape improvements, public art, public toilets, playground upgrades, swimming pool improvements, ANZAC Memorial improvements, and Heritage Trail work. Officers have worked with the Board on their latest project at Eastbourne Sports Club and Community Hall, providing free design and drawing services and access to recycled pavers and wharf timbers. Additional SSCIF funding is not available to the Board for this project.

Naenae Park Pavilion

20. Earthquake seismic work on the Naenae Park Pavilion is scheduled to commence during the week of 27 May 2019. This process will take six to 10 weeks to complete and will include moderate improvements to the shower and changing room facilities in changing rooms 1 and 2, along with structural improvements to the building itself. Officers have liaised with and provided an update to club committee members within the last two months.

Petone Grandstand

21. Officers have previously looked at options for the Petone Grandstand and concluded that, without a significant financial investment, the grandstand was not suitable for broader sports club use, other than for changing rooms and public toilets. The current location of the meeting room/social space at the back of the grandstand is not well positioned to support activity on the park.

Petone Wharf

22. Council agreed in principle at its meeting in June 2017 that the Petone Wharf be refurbished, apart from the outer 48 metres of the head which was to be demolished. Council later decided to push the main refurbishment work out to 2032, but included budget provision in the interim period at intervals to undertake essential works to ensure the wharf is safe for use. The blue shed was badly damaged in the Kaikoura Earthquake when the head of the wharf and the approach moved at different frequencies and smashed against each other. The damaged shed was dismantled and removed from the wharf and has been stored off site. The engineer considers that much of the building fabric will need to be replaced with new materials, and a price to restore the building has been sought.

Williams Park Tennis Courts Proposal

23. Officers will engage with Wellesley College to work through the scope of the project to redevelop the Williams Park tennis courts, and determine which items from that scope can be implemented by Council in the form of operations and maintenance.

City Environment

Naenae Town Centre

24. During the pilot of the online tool, the opportunity was taken to ask for views and ideas on the future of the Naenae Library site. The online tool asked a series of questions in separate discussion forums, and supported a range of face-to-face activities during March and April 2019. Discussion questions asked for thoughts on future use of the current library site once it has moved into a planned new community hub, and ideas to revitalise the wider Hillary Court area. Themes and comments in the online discussion have been collated and will inform decision-making. Both the library and hub projects have been paused while Council takes the opportunity to look at the bigger picture for community facilities in Naenae, following closure of Naenae Pool.

Recycling Bins

25. Council recently made changes to which recycling materials it is collecting. However, it is also undertaking a review of its kerbside recycling service in terms of how it collects recyclables. The option of moving to larger bins, as utilised by other councils in New Zealand, has been shortlisted for detailed analysis and was presented at a Council workshop in late May.

Suburban Shopping Centre Improvement Fund

26. The Maungaraki Community Association has asked for funding to be brought forward to enable improvements to be made to the Maungaraki Shopping Centre. This Centre has been prioritised under Council’s Suburban Shopping Centre Improvement Fund and is currently awaiting funding. The current thinking is that funding will be available for Maungaraki in 2024-25.

Transport Plan to Work Towards Carbon Zero

27. We do not currently have a Transport Plan to achieve Carbon Zero by 2050 but are looking at the potential development of a community focused Hutt City Zero Carbon Plan. This plan would cover transport.

City Development

Releasing Land for Housing Eastern Hills

28. In general terms, housing development on the eastern hills would not be suitable given the steepness of much of the terrain and the desire to retain a green backdrop to the city. Most of the eastern hills are owned by Council as reserve, with the restoration of the native bush a long term objective. There is some land behind Waddington Drive which is not designated reserve that Urban Plus Limited has been considering. Due to the high cost of development, this has not been progressed at this time but has not been ruled out for the future.

Roading and Accessways

Maungaraki School and Community Hall Driveway Entrance

29. The Maungaraki Community Association request for separate pedestrian and vehicle access to the community hall and school will be considered by officers for funding in the next Long Term Plan.

Substandard Road Upgrading Programme

30. The Maungaraki Community Association has requested that funding be brought forward to 2020-21 to allow the horseshoe bend in Maungaraki Road to be upgraded and all work to be completed in that financial year. This project is next on the prioritised list of substandard road upgrades and is scheduled for 2020-21 but at this stage officers are not sure of the costing and therefore the timing of the work.

Walking/Cycling

31. The Eastern Bays Shared Path project is in the detailed design and consenting phase, with the resource consent lodged on 17 April 2019. It is expected the consent may take six to 12 months to process. A Council Workshop has been arranged in June 2019 for Councillors to provide direction on Cycleway/Shared Path expenditure, as the cost of the almost completed Wainuiomata Hill Shared Path and the estimates for The Beltway, Eastern Bays Shared Path and the critical connectivity work required significantly exceed the currently approved budgets. This update fulfils the commitment given at the 12 February 2019 Community Plan Committee meeting for an update on the Eastern Bays Shared Path project.

32. As well as the major Cycleway/Shared Path projects, work is being undertaken on connectivity for cyclists and pedestrians. Connecting the Cycleways/Shared Paths to each other is important, and analysis is also being undertaken on where we can get best value for connecting to schools, public transport, recreation spaces, the CBD, places of employment etc. This connectivity work will be critical in activating our multi modal network.

33. Officers have updated a number of the “All going to plan!” ideas presented to the 8 May 2019 Community Plan Committee meeting, and these are attached as Appendix 1.

Consultation

34. Formal consultation was not undertaken on this year’s Annual Plan as no significant or material changes were proposed from the Long Term Plan 2018-2028. Instead, the 2019-2020 Annual Plan had a different focus which was called “All going to plan!”, and was the subject of a new online engagement forum where residents were encouraged to share their views and ideas.

35. This report contains further information that was requested by the Committee in response to the feedback submitted including presentations made to the Committee by groups and individuals.

Legal Considerations

36. There are no legal considerations in respect of this report.

Financial Considerations

37. Financial considerations are outlined in this report or in the draft budget.

Appendices

No.	Title	Page
1 ⇩	Update on "All Going to Plan" Ideas Presented to 8 May 2019 Community Plan Committee Meeting	271

Author: Joyanne Stevens

Contractor

Reviewed By: Wendy Moore

Divisional Manager, Strategy and Planning

Approved By: Helen Oram

Acting General Manager City Transformation

[1] Incomplete responses where only the initial question regarding business ownership/tenancy had been completed were removed. Incomplete responses where a later complete response was received from the same IP address, and the responses completed matched, were also removed.

[2] Due to rounding individual percentage totals may not round to the aggregated figure. For example if 57.1% state yes and 21.4% report somewhat the response rates reported are 57% and 21%. However, when the total aggregated is 78.5% this rounds to 79%.

[3] 26 July 1994, Policy and Finance Committee paper

Mayor WR Wallace (Chair)
Deputy Mayor D Bassett
Cr G Barratt	Cr C Barry
Cr L Bridson	Cr J Briggs
Cr MJ Cousins	Cr S Edwards
Cr T Lewis	Cr M Lulich
Cr G McDonald	Cr C Milne
Cr L Sutton

UPDATE ON “ALL GOING TO PLAN” IDEAS PRESENTED TO 8 MAY 2019 COMMUNITY PLAN COMMITTEE MEETING
IDEA	COMMENT
Victoria Street Petone from Hutt Road to Jackson Street Reverse the one way from south to north to north to south	The Transport Division are taking a holistic view of how the local transport network will operate into the future and this option will be assessed through that process.
It would be great if we could have traffic lights at the Ewen Bridge roundabout. At peak times the traffic clogs the exits and very few people indicate.	Traffic signals do provide greater control of movement through intersections. This location is complicated by two roundabouts in close proximity. The area will be reviewed as part of the RiverLink Project which does impact the local road network in this location.
(Brent – Northern Ward) Hi there One improvement I would like to see is better access for pedestrians and cyclists on the stokes valley round about, getting across is very risky, my suggestion is maybe signage and road marking, vehicles block the access.	Improving access and safety for pedestrians and cyclists is a priority for Council’s Transport Division. We have looked at the Stokes Valley roundabout in the past and it is difficult, largely because of its size. There is existing signage for cyclist safety in place and a cycle path in the shoulder heading north. There are also refuge islands and pathways across these islands but we agree it is a challenging intersection for pedestrian and cyclists. We will continue to look for ways to make passage through the roundabout safer for cyclists and pedestrians in future.
(Heef – Central) Are the Council supporting extending the Melling line to Belmont at the same time in order to enhance public transport options for the Western Hills?	Provision has been made to allow for the extension of the Melling Line to Belmont in the Melling Intersection Improvement design, but at this stage there is no commitment to do so.
(Fib74– Wai-nui-o-mata) I do find it frustrating that Wainuiomata is seen as a sports hub. We have PhDs as well but nothing is invested in interests outside of sports. I agree with the pathway over hill but are now scared I will encounter a lime scooter with bikes as I walk it. I would love more investment in Love Wainui rather than sports. Sports labels this community. I am tired of asking Council to reflect on Esplanade commuting issues every feedback round as if we want residents committed to the Hutt we would ensure they are in cars for shorter periods of time if they work in Wellington. I see consultation is occurring on the CVL with Petone ward. Surely HCC should include the CVL in all ward consultation? I am uncertain as to whether what is proposed will assist commuting traffic to Wellington. Our current public transport system does little to support the concept that people from suburbs like Wainui might work in Wellington or Porirua. Yes public transport is a GWRC issue but we need more direct access to the hub of Petone. We need connection to Porirua through public transport. We need an integrated system. Our children should have direct access to our Polytechnic and not have to commute North to travel South. HCC should therefore consult widely on the CVL. It is not a Petone investment alone. HCC also needs to actively work with GWRC to ensure our public transport system works. I agree with others that Wainui is a vulnerable community when it has only one access way.	Wainuiomata is seen by Council as far more than a sports hub and Council is committed to supporting its growth and development as a key area of the city. You’re right the CVL is important to everyone in Lower Hutt and your comments on this are equally important as those from Petone. As this project develops, there will be consultation with residents throughout Hutt City. Council continues to work with GWRC to improve public transport in the city. Council is committed to improving the transport choices available to people whether that is active, public or private transport. GWRC have a Regional Public Transport Plan which identifies its priorities and Council has made several submissions to GWRC asking for improved public transport connections for its communities such as Wainuiomata and Stokes Valley. We have a number of suburbs with only one means of access but at least with Wainuiomata that accessway is very resilient. The Wainuiomata Hill Road is very wide and it is likely that even with slips and drop outs the road could be made passable soon after a major event. The Wainuiomata Hill Shared Path has further improved this resilience.
A footpath on Belmont Hill Road that goes from Maranatha Christian School up the hill toward Belmont Regional Park. There is currently no safe access on the narrow road for walking or cycling and it is used regularly for school children and cyclist going to and from Belmont Regional Park.	It is unlikely that Council will be developing a footpath up the hill towards Belmont Regional Park. The work is focused on further down Hill Rd and connecting to the school from below where there is more pedestrian demand.
Stokes valley to Hayward interchange Build a bridge and connection to the Haywards hill interchange to alleviate traffic in Silverstream and Kennedy good bridges, provide redevelopment money to manor park golf course to help with their financial situation. This is one of the fastest growing suburbs in the city and needs better infrastructure and secure access.	This concept has been investigated before and the cost is prohibitive.
Bpr (Wai-nui-o-mata) How about walking and cycle trails/paths along the drainage ditches/black creek. Cycling along Wellington road is a death wish, so this would open up safe paths for cyclists and walkers to get about Wainuiomata. It would create safe options for people to get active in their local community, and to get about on errands and visits without using a car. And it would create a safe path to the new shared pathway over the hill, which will need safe access to it if it is to be used to its fullest potential.	As well as the major cycleway/shared path projects, we are undertaking work on connectivity for cyclists and pedestrians. Connecting the cycleways/shared paths to each other is important and we are also analysing where we can get best value for connecting to schools, public transport, recreation spaces, the CBD, places of employment etc. This connectivity work will be critical in activating our multi modal network.